Oxy Stock Could Surge 20% with Oil Prices Above $100

Occidental Petroleum's (OXY) stock has been on a rollercoaster ride this year, hitting a 52-week high of $67.45 per share in March after gaining nearly 60% in value. However, with the price of WTI crude oil dropping back to around $92 per barrel from its four-year high of $112.25 per barrel in May, Oxy's stock has also declined to around $58.

The company is highly sensitive to oil prices due to its upstream business generating most of its revenue. When oil prices are high, Oxy can grow its revenue faster than its expenses, but when they drop below breakeven levels, its expenses grow faster than its revenue. To maintain its current capital expenditures and dividends, Oxy needs oil to remain above its breakeven range of $40-$45 per barrel.

However, if the price of WTI crude oil rises above $100 again and stays there, it could lead to a significant increase in Oxy's stock price. In this scenario, Oxy's stock could easily rise at least 20% by the end of 2026.