Oil Stocks to Watch: $100 Oil Boosts Occidental Petroleum and Chevron

Oil prices have surged above $100 per barrel due to ongoing tensions in the Middle East. This has led to increased revenue for oil companies, particularly those with upstream operations. Two such companies that stand to benefit from this trend are Occidental Petroleum (OXY) and Chevron (CVX).

Oxy's focus on upstream exploration and extraction makes it more exposed to higher oil prices than its peers. The company needs WTI crude oil to remain above $40 per barrel to support its capital expenditures and dividends. Analysts expect Oxy's adjusted earnings per share to surge 175% in 2026, making it a bargain at 16 times forward earnings.

Chevron, on the other hand, is a more diversified company with operations across various segments, including upstream, midstream, and downstream. While its exposure to higher oil prices is lower than Oxy's, its scale and diversification make it a more balanced long-term investment. Chevron has raised its dividend annually for 39 consecutive years and plans to increase its oil and gas production by 2-3% annually through the end of the decade.