Warren Buffett-backed Occidental Petroleum approached a buy point Tuesday as energy stocks appear to be picking up steam with oil prices trading solidly above $80 per barrel. Meanwhile, OPEC+ met Wednesday to assess market conditions, keeping oil output policy unchanged.
U.S. crude futures advanced near to $86 per barrel on Wednesday, hitting the highest levels in five months.
Brent, meanwhile, traded above $89 per barrel, approaching a six-month high. The international benchmark rose amid prospects of higher demand and geopolitical tensions after the Israeli airstrike on Iran's embassy in Syria.
Oil prices have advanced steadily since early February as indications point toward growing demand in China.
China's manufacturing activity expanded for the first time in six months in March, with the official purchasing managers' index (PMI) coming in at 50.8, up from 49.1 a month earlier, according to figures published Sunday. The number shows only modest expansion, but is a marked turn from the previous four months as concerns about China's economy weighed on oil prices.
Meanwhile, the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, held a joint ministerial monitoring committee meeting Wednesday to review the market and the implementation of oil output cuts. OPEC+ is scheduled to meet on June 1 to look at production policy changes.
Members of the oil cartel earlier this month agreed to extend voluntary output cuts of 2.2 million barrels per day to the end of the second quarter to support the market.
Warren Buffett, Energy Stocks And Oil Prices
With oil prices remaining well above $80 per barrel, energy stocks are beginning to advance again after suffering at the end of 2023.
On Wednesday, Occidental Petroleum, a Warren Buffett favorite, gained 0.7% to 67.71 during market action, topping a saucer base with an official 67.67 buy point, according to MarketSurge.
The 17 stocks in the IBD-tracked Oil & Gas-International Exploration & Production industry group has gained 10% in 2024.
ConocoPhillips is in a buy zone, slightly extended above an official 127.35 entry. Meanwhile, Hess — as it waits for its consolidation with Chevron to be finalized — is currently 2% above a 152.13 buy point from a cup-with-handle base.
Supermajor Chevron, another Warren Buffett stock, has formed a saucer base with a 171.70 buy point. Chevron stock is working on its third consecutive monthly advance but is currently around 8% below its buy point. CVX stock is arguably still in range from an early entry around 157 from some consolidation above the 200-day line.
Exxon Mobil is also in a saucer base and is trading 2% below an official 120.70 entry, according to MarketSurge. XOM has gained ground for three straight months, including an 11% advance in March.
Exxon and Chevron are part of the IBD-tracked Oil & Gas Integrated industry group. The 22 stocks that make up that group have collectively gained 9.7% this year.
Occidental stock has a 45 Composite Rating out of 99. The Warren Buffett stock also has a 64 Relative Strength Rating and a 10 EPS Rating.
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