Occidental Petroleum shares have pulled back to about $50 after hitting a 52-week high of $67.45 on March 31, as WTI crude oil prices retreated from a four-year high of $112.25 per barrel in mid-May to around $70. The company is more exposed to volatile crude prices than larger integrated rivals like ExxonMobil and Chevron because it generates most of its revenue from upstream exploration and production. Occidental needs oil to stay above $40 to $45 per barrel to sustain its capital expenditures and dividends, and its free cash flow significantly increases above $60 per barrel. The stock trades at 10 times forward earnings, but analysts may lower near-term forecasts if oil prices continue to decline.
Occidental Petroleum CorporationOccidental's stock drops as WTI crude falls to $70, directly hurting its upstream-focused revenue and free cash flow.
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