Occidental Petroleum Outlook - Technical Weakness and Mixed Fundamentals

Market Snapshot

Occidental Petroleum's technical outlook is weak, with bearish signals dominating the chart. The stock has experienced a 1.24% price rise recently, but technical indicators suggest caution with an overall score of 3.84 (internal diagnostic score, 0-10).

News Highlights

• Nigeria’s Tinubu Announces New Oil Sector Incentives – President Bola Tinubu introduced a new executive order to reduce project costs and attract investment in Nigeria's oil and gas sector. These incentives are likely to benefit global E&P players, including Occidental, by increasing demand and improving operating environments.
• OPEC+ Considers Larger Output Hike in July – Sources indicate OPEC+ may increase oil production by more than 411,000 barrels per day in July. A significant increase could lead to oversupply, potentially suppressing oil prices, which would pressure Occidental's revenue and margins.
• Colombia Sees 8% E&P Investment Increase – Colombia’s investment in oil and gas exploration and production could rise by 8% to $4.68 billion in 2025. While not a direct impact for OXY, this reinforces a global trend of increased upstream investment that could support oil prices over the long term.

Analyst Views & Fundamentals

The recent analyst consensus shows a simple average rating of 3.00 and a performance-weighted rating of 4.94. This suggests a moderate optimism, but with some dispersion in expectations. The current price trend is upward, aligning with the optimistic market sentiment, although the technical signals contradict the bullish price movement.

Key fundamental factors, as evaluated by the model, include:

• Revenue-Market Value (Revenue-MV): 0.88 – (internal diagnostic score: 2/10)
• Net profit attributable to parent company shareholders / Net profit (%): 74.59% – (internal diagnostic score: 3/10)
• Price-to-Book (PB): 0.38 – (internal diagnostic score: 3/10)
• Profit-MV: 0.67 – (internal diagnostic score: 0/10)
• Net income-Revenue: -0.22% – (internal diagnostic score: 3/10)
• Long-term debt to working capital ratio: 95.93% – (internal diagnostic score: 1/10)
• Fixed assets turnover ratio: 0.19 – (internal diagnostic score: 2/10)
• Total assets turnover ratio: 0.16 – (internal diagnostic score: 2/10)
• Asset-MV: 1.35 – (internal diagnostic score: 5/10)
• Inventory turnover days: 74.08 – (internal diagnostic score: 2/10)

The fundamental scores indicate a mixed picture. While some metrics like Asset-MV and Revenue-MV show decent strength, leverage and operating efficiency remain concerning with low scores in Long-term debt to working capital ratio and Net income-Revenue.

Money-Flow Trends

Large institutional and extra-large investor flows are trending negatively, with inflow ratios at 0.499 and 0.488 respectively. Meanwhile, small and medium investors show more positive flows. The overall money-flow score is 7.87 (internal diagnostic score, 0-10), which is considered good. This suggests that, despite the bearish technical outlook, retail and smaller investors remain cautiously optimistic.

Key Technical Signals

Technical indicators show a bearish bias, with 6 negative signals and only 0 bullish ones. The WR Overbought and Bearish Engulfing patterns are particularly concerning with internal diagnostic scores of 3.08 and 3.56 respectively. Recent chart patterns include:

• 2025-09-10: Ex-Dividend Date, Bullish Engulfing, Dividend Record Date
• 2025-09-12: Bearish Engulfing
• 2025-09-16: WR Overbought

These signals suggest that while there were some positive developments in late September, the overall trend over the last five days has been weak and bearish. The market remains volatile and directionally unclear, with a strong recommendation to avoid further investment in OXY based on the technical analysis.

Conclusion

Given the weak technical outlook, mixed fundamentals, and contradictory institutional vs. retail flows, Occidental Petroleum is currently not a compelling buy. Investors are advised to wait for clearer directional signals or to consider a pull-back into the stock if risk appetite aligns with the expected volatility. For now, OXY remains a stock to monitor, especially with regard to upcoming developments in global oil supply and price dynamics.