The shares of international energy company Occidental Petroleum’s (OXY) have rallied 94.3% in price year-to-date as U.S. crude oil prices hit multi-year highs with OPEC+ sticking with its output increase plan. However, given the surprising rise in crude inventories and the risk of a fourth wave of COVID-19 hitting several countries, the energy space is expected to remain volatile. So, will the stock be able to maintain its momentum? Let’s find out.Oil and gas company Occidental Petroleum Corporation (NYSE:OXY) in Houston, Tex., conducts exploration and production activities in the United States. The energy company’s strong operational performance in its last reported quarter helped generate its highest level of free cash flow for the second consecutive quarter in a decade. So far this year, the stock has surged 94.3% in price as the demand for petroleum products rebounded.
Furthermore, oil prices hit a three-year peak on October 4 after OPEC+ confirmed it would stick to its policy of increasing output gradually. OXY’s continued improvement in average global production should position it to capitalize on the growing demand.
However, an unexpected increase in U.S. crude inventories has caused oil prices to decline recently. And even though investors’ increasing risk-tolerance in the energy space bodes well for the stock, concerns related to the volatility in crude oil prices and Hurricane Ida-induced oil production losses could lead to OXY suffering a price pullback in the near term.