Occidental Petroleum stock (OXY) shares experienced significant volatility this week following Warren Buffett’s announcement that Berkshire Hathaway would acquire the company’s OxyChem business for $9.7 billion in an all-cash transaction. The stock jumped over 3% on October 2nd before giving back all of its gains, closing at $44.23 after reaching $49.18 in the pre-market session. This marks Berkshire’s largest acquisition since 2022 and further demonstrates Buffett’s conviction in OXY, having already accumulated a substantial equity position in the energy producer.
Key Drivers of the OXY Stock Move
- The $9.7 billion divestiture enables Occidental to streamline its operations and focus on its core oil and gas production business, while strengthening its balance sheet. Management has publicly sworn off new large acquisitions after the sale.
- Options traders showed mixed sentiment with heavy activity in both calls and puts. Notable sweeps included $700K in December $42.50 puts and multiple six-figure trades in long-dated January 2028 $40 calls, suggesting institutional hedging alongside bullish positioning.
- Relative performance within the energy sector has been volatile, with OXY fluctuating between the 40th and 67th percentile versus peers since July, currently positioned at approximately the 64th percentile.
The OxyChem deal represents strategic repositioning for Occidental, which will use the proceeds to reduce debt and enhance capital returns. Analysts from Roth Capital and UBS have raised price targets to $46 following the announcement, though most maintain neutral ratings. The transaction comes after weeks of speculation that began September 29th when reports first surfaced about potential negotiations.
OXY Unusual Options
Options activity surged dramatically from September 29 to October 2. The most significant flows included a $700K trade in December 2025 $42.50 puts and aggressive accumulation of January 2028 $40 calls totaling over $2 million in premium. Near-term October expiry $45 puts saw sweeps exceeding $140K, indicating active downside protection. Conversely, bullish positioning emerged in January 2026 $45 calls with $210K premium paid, suggesting traders expect recovery beyond short-term volatility.
OXY Government Trades
Congressional activity in OXY has been minimal, with only one reported transaction: a purchase of $1K to $15K by House Democrat Gilbert Cisneros on August 5th, showing a 4% gain as of the latest filing.
OXY Seasonality
Historical data from October 2020 shows mixed October performance, with only 33% positive months and average gains of 1.5% over six samples. However, OXY has demonstrated strong seasonal patterns in early-year months, with February (80% positive, average 9.7% gain) and March (100% positive, 9.0% gain) historically favorable. November also shows promise despite lower frequency, averaging 10.6% gains.
Analyst Focus
Analyst sentiment remains cautious with predominantly neutral ratings. Morgan Stanley downgraded OXY to hold in August with a $52 target. Melius Research initiated coverage at hold with a $64 target on August 20th. Most recently, Roth Capital maintained a neutral rating but raised its price target from $45 to $46 following the OxyChem announcement. UBS has progressively increased targets from $38 in August to $46 in September, though maintaining hold ratings throughout.
How to Track OXY Live With TrendSpider
Monitor OXY’s reaction to this transformational deal with real-time tools:
- Track insider and institutional positioning as the OxyChem transaction progresses toward closing
- Compare debt-to-EBITDA ratios and cash flow metrics before and after deal completion
Market Update Into September 7th: Inflation Data Incoming