Optimism over the health of the global economy has surged in recent weeks as investors have scooped up shares in a variety of industries in order to benefit from a budding recovery. This joyful mood has also helped to boost the price of crude oil, which was trending close to its 52-week high, approaching $94/bbl. However, in recent days, fears over a slowdown in key emerging markets and talks of a supply boost from OPEC have weighed heavily on the price of oil, forcing the price back down below the $90 mark. Given this recent volatility in the price of one of the world's most important commodities, investors are likely to focus in on a key earnings report before the bell today for further guidance on the subject from Occidental Petroleum (NYSE: OXY). The Los Angeles-based oil and gas exploration and production firm is expected to help set the tone for the entire exploration sector in the new year with the report, so investors should look for the energy giant to remain in focus throughout the trading session. The company is expected to report earnings of $1.54 a share on revenues of roughly $5.13 billion, which compares relatively favorably to the year-ago period in which the firm posted EPS of $1.30 on revenues of $4.54 billion.

Of particular interest to investors is likely to be the company's recent deals which are likely to drive future earnings for many quarters to come. First, the company's sale of projects in Argentina for $2.5 billion and its subsequent purchase of $3 billion worth of gas fields in the U.S. is likely to weigh on investors' opinions of the stock as the company as OXY continues to ramp up its exposure to natural gas exploration and production projects. In this same vein, further guidance on the company's recent massive purchase of a 40% interest in a large gas field in the United Arab Emirates is also likely to play a role in investors' perceptions of the company's outlook. 

The deal allows OXY to participate in the development of one of the region's biggest natural gas fields under a 30-year contract. However, capital expenditures for the project are not expected to be cheap; some estimates call for roughly $10 billion in spending, a relatively large figure considering that the firm has a market cap of less than $100 billion. Furthermore, the project looks to be fraught with risk as well since it comes after oil giant ConocoPhillips (NYSE: COP) abandoned the project in mid-2010 in order to pursue other, lower risk opportunities. "This is good news for Abu Dhabi that they have found someone willing to work on the project, which is very dangerous and costly, and that's why Conoco pulled out," Kuwait-based independent oil analyst Kamel Al Harami said in regard to the Abu Dhabi government deal with OXY. Nevertheless, if the company is able to offer solid guidance based on these deals and other market trends, it could give a nice boost the oil and gas exploration industry at large during Wednesday's session [also see Will Iraqi Oil Deals Boost Energy ETF?].

One fund that looks to especially be in focus given this key earnings report is the iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (NYSE: IEO). The popular energy ETF devotes 15.9% of its holdings to OXY while also giving large weightings to Apache, Anadarko Petroleum, and Devon Energy. Although IEO has risen with the broad energy market over the past few months -- posting a gain of 24.5% in the previous half-year period -- the fund has slumped back along with oil prices over the past week, pushing shares of IEO down close to 3% in just five days [also read Energy ETFs: Six Very Different Ways to Play].

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