Occidental's 0.68% Slide Amid 450th Volume Rank as Oil Oversupply and Demand Fears Weigh

Market Snapshot

On November 3, 2025, Occidental Petroleum (OXY) closed with a 0.68% decline, marking a modest pullback amid broader market volatility. The stock’s trading volume for the day totaled $0.30 billion, ranking it 450th in dollar volume among U.S.-listed equities. While the drop was relatively modest, it occurred against a backdrop of persistent bearish sentiment in the oil sector, driven by concerns over oversupply and moderating global demand.

Key Drivers

The primary factor influencing OXY’s performance lies in the deteriorating macroeconomic outlook for the oil market. Recent reports highlight a growing supply glut, with global oil surpluses averaging 1.9 million barrels per day (mb/d) in the first nine months of 2025. Analysts warn that this trend could intensify in 2026, with potential surpluses reaching 4 mb/d as OPEC+ production increases and Chinese economic growth slows. The International Energy Agency (IEA) has flagged these developments as a “tipping point,” suggesting structural imbalances that could further depress oil prices.

Compounding these concerns, Occidental’s Q3 2025 earnings report, scheduled for November 10, faces elevated expectations. While the consensus estimates an adjusted earnings per share (EPS) of $0.53—a 33% increase from Q2—this figure remains significantly below the same period in 2024. The modest improvement is attributed to a $3 per barrel rise in WTI crude prices, which is projected to boost after-tax earnings by approximately $137 million. However, the sector-wide supply risks and geopolitical uncertainties—such as potential U.S. sanctions on Russian oil or Middle Eastern supply disruptions—introduce volatility that could disrupt these expectations.

A notable positive development for OXY emerged in the form of Berkshire Hathaway’s $9.7 billion acquisition of Occidental’s chemical business, OxyChem. The all-cash transaction, announced in October 2025, allows Occidental to redirect capital toward debt reduction and core operations. This move aligns with Warren Buffett’s strategic focus on high-quality assets, and it underscores OxyChem’s value as a standalone entity with strong cash flow generation. By offloading this division, Occidental aims to streamline its operations and enhance shareholder returns, though the immediate impact on earnings remains limited to Q3 2025.

The company’s broader efforts to expand its natural climate solutions business also reflect long-term strategic priorities. Occidental has advanced its carbon capture and sequestration (CCS) projects, including a joint venture for pipeline infrastructure in Louisiana. These initiatives, expected to reach first injection by 2029, position OXY to capitalize on growing demand for carbon credits and environmental, social, and governance (ESG) investments. However, the third-quarter earnings report for its wood products division—a $48 million loss—highlights operational challenges in unrelated business segments, though these are not directly tied to OXY’s core oil and gas operations.

Geopolitical tensions and macroeconomic risks remain critical variables. The potential for U.S. sanctions on Russian oil producers could trigger short-term price spikes, while a stronger-than-expected recovery in Western and Chinese economies might bolster demand. Conversely, a worst-case scenario involving a supply glut could exacerbate downward pressure on oil prices, further constraining OXY’s profitability. Analysts emphasize that Occidental’s ability to navigate these dynamics will hinge on its cost discipline, capital allocation decisions, and the success of its climate-related initiatives.

In summary, OXY’s near-term performance is shaped by a fragile oil market, earnings expectations, and strategic moves like the OxyChem sale. While the stock’s 0.68% decline reflects broader sector headwinds, the company’s focus on debt reduction and ESG-aligned projects offers a counterbalance to macroeconomic risks. Investors will closely monitor the Q3 earnings report and global supply-demand dynamics to gauge the trajectory of the stock in the coming months.