Why Chevron, Occidental Petroleum, and Devon Energy Rallied This Week
Shares of large-cap oil and gas companies, including Warren Buffett holdings Chevron (NYSE: CVX) and Occidental Petroleum (NYSE: OXY), along with shale pure-play Devon Energy (NYSE: DVN), were up strongly on the week, rising 12.4%, 14.7%, and 20.1%, respectively, through Thursday.
After oil stocks fell in September on mounting recession worries, OPEC+ surprised the markets this week with a larger-than-expected coordinated production cut. That was enough to send oil from roughly $80 a barrel to begin the week to close to $90 on Thursday, lifting these three oil-sensitive stocks along with it.
On Wednesday, members of OPEC+ agreed to a 2 million barrel-per-day production cut, which was larger than expected and in defiance of U.S. calls to continue producing amid global inflation challenges. While the decision is politically fraught, as it is seen by some as helping Russia at the expense of the U.S. and other Western nations, the lower supply is a positive for oil producers such as these three stocks.
Source Fool.com
