Occidental Petroleum Affects Market with Price Declines

Occidental Petroleum Faces Price Drop in Oil and Gas Production

Occidental Petroleum has recently reported lower realized prices for both its oil and gas production during the third quarter. As a major entity in the US oil sector, the company's total oil output prices have decreased by nearly 6%. Moreover, the company has noted a substantial decline of 26% in US natural gas output prices.

Impact of Global Oil Demand Concerns

The primary reason behind this decline in oil prices for the July to September period is linked to widespread concerns regarding the growth of global oil demand. This apprehension has reverberated through the market, affecting many production entities, including Occidental.

US Natural Gas Price Drops and Its Consequences

In conjunction with oil price challenges, US natural gas prices have hit significant lows, with instances of Waha hub prices turning negative more frequently than ever in 2024. This dramatic shift illustrates the volatility and unpredictability facing companies in the sector.

Future Price Expectations

Current estimates indicate that Occidental Petroleum's average realized oil prices are expected to hover around $75.33 per barrel. Furthermore, global natural gas liquids prices are forecasted to reach approximately $20.47 per barrel. This downward trend in pricing can significantly influence the company's financial projections.

Company Financial Forecasts Amid Price Volatility

According to recent analyses, Occidental anticipates that the average prices for its US natural gas production will be about $0.40 per million cubic feet for the quarter, a notable drop from the previous price of $0.54 per million cubic feet.

Competitors Experience Similar Struggles

Occidental is not alone in this predicament. Just a week prior, ExxonMobil indicated that its third-quarter upstream earnings might decline by as much as $1 billion due to the pressures of lower oil prices and refining margins. Such announcements highlight the broader impact of pricing trends across the industry.

Adjusted Profit Predictions and Structural Changes

In terms of profitability, estimates compiled by analysts suggest that Occidental will report an adjusted profit of $0.85 per share in the upcoming quarter. This represents a reduction from $1.03 per share obtained in the second quarter, as well as a decrease from $1.18 per share reported in the same quarter last year. These adjustments reflect the ongoing pressures facing the company's earnings.

Strategic Acquisitions and Production Growth

Further compounding these challenges, Occidental completed a significant $12 billion acquisition recently, which was expected to boost production over two months in the third quarter. Despite these strategic moves, the broader market conditions continue to pose uncertainties for the company's future performance.

Final Thoughts on Market Trends

As Occidental Petroleum navigates through these price declines, the industry remains vigilant. Market dynamics continue to shift, and the focus will likely remain on how global demand trends evolve moving forward. Stakeholders will be eager to see how the company adapts to meet these challenges while maintaining operational efficiency.

Frequently Asked Questions

What caused the decline in prices for Occidental Petroleum?

The primary cause of the decline in prices is attributed to concerns over the growth of global oil demand during the third quarter.

How much have US natural gas prices fallen?

US natural gas prices have seen a dramatic decline of about 26% in recent months, reaching multi-year lows.

What is Occidental Petroleum's forecast for oil prices?

Occidental's average realized oil prices are expected to be around $75.33 per barrel.

How has the acquisition affected Occidental's production?

The recent acquisition is anticipated to increase production, contributing positively for two months in the third quarter.

What are the expected profit adjustments for Occidental Petroleum?

Analysts predict an adjusted profit of $0.85 per share for the third quarter, a decrease from the previous quarters.

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