Why Occidental Petroleum Stock Rocketed More Than 10% in January

Occidental Petroleum (NYSE: OXY) started 2026 disconnected with a bang. Shares of the lipid and state shaper rallied 10.4% successful January. That meaningfully outperformed the S&P 500's 1.4% emergence past month.

A rebound successful crude lipid prices was a major catalyst for the oil stock past month. However, it wasn't the lone origin down Occidental's January surge.

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Crude prices skyrocketed past month. Brent, the planetary lipid benchmark, rocketed 16%, portion WTI, the U.S. benchmark, surged 14%. That was the archetypal monthly emergence successful lipid prices successful six months.

Oil rallied amid imaginable proviso disruptions. The U.S. subject captured the erstwhile Venezuelan President Nicolás Maduro and aboriginal charged him with narcoterrorism. While the country's lipid infrastructure needs a large rebuild, which volition instrumentality time, there's imaginable for proviso outages successful the interim. Additionally, tensions betwixt the U.S. and Iran are growing, which could besides origin proviso disruptions.

Higher lipid prices volition person a nonstop payment connected Occidental Petroleum's bottommost line. They would alteration the institution to nutrient much cash, which it tin usage to repay indebtedness and instrumentality to shareholders.

Oil prices weren't the lone upside catalyst for Occidental Petroleum past month. The lipid elephantine closed the merchantability of its erstwhile chemicals business, OxyChem, to Berkshire Hathaway successful aboriginal January. The lipid institution received $9.7 cardinal successful currency for the unit. Occidental expects to usage $6.5 cardinal of that currency to trim debt, enabling it to execute its people of bringing its main indebtedness equilibrium beneath $15 billion. As a result, it volition present person greater flexibility to absorption connected increasing its lipid and state accumulation and delivering semipermanent worth for shareholders.

Occidental Petroleum besides amended its existing Delaware Basin earthy state gathering declaration with its affiliated master constricted partnership, Western Midstream Partners. They're transitioning from a cost-of-service statement to a fixed-fee structure. As portion of the deal, Occidental volition transportation 15.3 cardinal Western Midstream communal units it presently owns to the MLP, valued astatine $610 million. As a result, Occidental's ownership volition autumn from 42% to 40%. Overall, the woody volition prevention Occidental Petroleum wealth successful the adjacent term, giving it much flexibility to make its lipid and state assets tied to this midstream agreement. Meanwhile, the transaction enables Western Midstream to proceed its improvement toward becoming a stand-alone entity.