Two Warren Buffett-backed energy stocks are among a group of five that are near buy points Tuesday as oil prices jumped after Saudi Arabia extended its voluntary production cut of 1 million barrels per day until the end of 2023.
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The news sent West Texas intermediate (WTI) oil prices up 1.7% to $87.20, hitting fresh nine-month highs. Meanwhile, Warren Buffett’s Occidental Petroleum (OXY) and Chevron (CVX) made strong moves Tuesday.
Energy stocks topped the market in 2022, after Russia’s Ukraine invasion upended global energy markets. Oil prices, and many energy stocks, have fallen off this year, dragged lower as global markets stabilized. However, U.S. oil prices recovered in July and August to above the psychologically important $80 per barrel level.
A number of factors — including China’s disappointing economy recovery after removing its Covid restrictions late last year — have weighed on recent oil prices. However, many analysts expect a move higher in coming months, as recovering demand runs up against tight supply.
On Tuesday, a number of energy stocks, along with Warren Buffett’s favorites, moved higher.
Warren Buffett: Energy Stocks Eye Buy Points
OXY gained 2.3% to 66.03 in above-average volume Tuesday, heading for a sixth straight advance as it rebounds from its 10-week moving average. It also passed an Aug. 11 high at 66.03. Aggressive investors willing to carry a little more risk could use that as an impromptu early entry level for the rising stock.
Meanwhile, Chevron stock rose 1.7% to 167.03, jumping above its 200-day line for the first time since May.
Warren Buffett began buying Chevron in 2020. Meanwhile, the billionaire investor has been on an OXY buying spree in the past two years.
Along with Warren Buffett-backed OXY and CVX, Devon Energy (DVN), EOG Resources (EOG) and SLB (SLB) also traded near buy points on Tuesday.
SLB (SLB), formerly known as Schlumberger, edged up 1.7% to 60.86. That moved it closer to the top of a buy range above a 58.70 buy point in its cup-with-handle base. The oilfield service giant has climbed around 32% from a June low.
EOG stock gained 3.3% to 135.33, closing in on a flat-base buy point at 135.92. The five-week base formed within a larger consolidation, and has healthy support at the stock’s 10-week moving average.
DVN edged up 2.5% to 54.22. It is trying to break above a 54.22 entry, also in a flat base. In addition, it faces possible resistance at its 200-day moving average. A break above both the buy point and the 200-day line could signal a very strong move.
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