Occidental Petroleum Corp (OXY)

[DiscoverGold]

Where Fundamentals Meet Technicals: OXY
By: Lyn Alden Schwartzer | June 28, 2024

This issue of Where Fundamentals Meet Technicals re-iterates my bullish view on energy names.

As I sit here typing this piece in Cairo, I can unfortunately report that Egypt faces daily rolling power outages, which are caused primarily by natural gas shortages. The grid operators spare my neighborhood from them, but most neighborhoods throughout Egypt are facing recurring scheduled power outages as the limited power generators can only power so many of them at once.

Egypt produces lots of gas domestically and also imports gas from Israel, but the total amount is increasingly insufficient for Egypt in the summer months when air conditioning demand is at its highest. They are turning to LNG imports, but there is limited capacity for that in the near term.

This anecdote is one of many, since it’s a common occurrence throughout the developing world. But it underscores how important energy is. There is vast demand for energy throughout emerging markets, and in the long run I expect that their total usage will go up considerably.

In particular, when the dollar index puts in more of a local top, and the Fed begins a rate-cutting cycle, it should alleviate the USD-denominated debt burdens of a number of emerging and frontier markets, and lighten up their liquidity situation enough to active more energy demand.

Occidental Petroleum

Occidental Petroleum (OXY) has been a Buffett darling for a while; Berkshire (BRK.B) just keeps eating it up and now owns over a quarter of the company. It’s a potential acquisition target in the long run.



Zac recently wrote about the stock (and sector):

“It is not like I ENJOY making things diagonals... (well maybe a bissel)

But we are in a larger diagonal for most of the energy names off 2020 lows so this (5) is an ABC. And thus inside the subwaves of the it is not at all abnormal for some of those moves to be diagonals themselves.

The move off the low could be i-ii of (i) of circle here on OXY but it is a bit large for that give the expected size for (i)... it is too small to reliably be a nest (i)-(ii)-i-ii of an impulse for circle c also.

But an a-b and micro 1-2 of c in blue for (i) of an ED would fit very well based on expected circle c-wave Fib PinBall.”



Read Full Story »»»

DiscoverGold