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Occidental Petroleum Stock Spikes. Here Are the Reasons Why.

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Occidental Petroleum

stock was rising sharply Monday. There are three reasons why.

First, oil prices were surging Monday on supply fears as the U.S. and its allies were considering a ban on Russian oil after Moscow’s invasion of Ukraine. West Texas intermediate crude oil, the U.S. benchmark, rose 6.9% to $123.65 a barrel. International benchmark Brent was up 6.5% to $125.82 a barrel; it had reached $130 a barrel in early trading.

Secretary of State Antony Blinken said over the weekend the U.S. and its European allies have been having a “very active discussion” about banning imports of Russian oil.

Secondly, Berkshire Hathaway disclosed late Friday in a filing that it owns a 9.8% stake in oil-and-gas producer Occidental Petroleum (ticker: OXY) worth $5.1 billion.

Berkshire Hathaway (ticker: BRK.A and BRK.A) disclosed in a form 4 filing with the Securities and Exchange Commission that it held 91.2 million shares of Occidental Petroleum, up from 29.8 million shares on Tuesday, which was disclosed in a separate 13-G SEC filing on Friday.

Lastly, it was reported by The Wall Street Journal that activist investor Carl Icahn sold the last of what was once a roughly 10% stake in Occidental Petroleum.

Icahn has been cutting his stake in the company, and in recent days sold the remainder of it, according to a letter he sent to Occidental’s board on Sunday, the Journal reported. Icahn’s two representatives on Occidental’s board are also resigning, he said in the letter, according to the Journal.

Icahn had clashed with Occidental and criticized its chief executive, Vicki Hollub, after the company outbid


Chevron

(CVX) to acquire Anadarko Petroleum in May 2019 for $38 billion.

“While we certainly had our disagreements with Vicki Hollub concerning M&A, we thank her for using her well-honed operating skills and resiliency so well in Occidental’s darkest hours,” Icahn wrote in the letter. “We believe our relationship with Occidental turned out to be activism at its best.”

Occidental shares rose 7.8% to $60.55 a share early Monday. The stock has soared 93.7% in 2022 as oil prices have spiked to their highest levels since 2008.

Write to Joe Woelfel at joseph.woelfel@barrons.com

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