What happened

Shares of oil and gas giant Chevron (CVX 2.60%) rocketed 25.9% higher in the month of October, according to data provided by S&P Global Market Intelligence. With earnings season in full swing, Chevron reported huge profits and cash flows for its third quarter. And the oil stock had more than just earnings backing its rally last month.

So what

Chevron didn't report earnings until October 28, but by then, the business had already logged most of its monthly gains. The two biggest reasons were a recovery in crude oil prices from their end-of-September slump and a hugely positive development on the Venezuelan front.

Earlier last month, OPEC+ members agreed to a larger-than-expected cut in oil production. The surprise move lifted oil prices higher. Oil stocks rallied, too, especially shares of upstream oil companies like Chevron, whose fortunes are tied directly to oil prices.

At around the same time, the Wall Street Journal reported the Biden administration was planning to lift sanctions on Venezuela that have, so far, throttled Chevron's operations in the country. Chevron has several oil projects operating under partnerships in Venezuela.

With oil prices ticking higher in the second half of October and Chevron's earnings just around the corner, investors continued to bet on the oil stock. Chevron didn't disappoint; it earned its second-highest quarterly profits in history and generated record cash flow from operations in the third quarter thanks to higher production and prices. Chevron stock surged toward its all-time high on the day of earnings.

Now what

Some investors might be wary about investing in Chevron stock now given that it's already risen 58% this year as of this writing. But three things could still keep investor interest humming in the oil stock: oil prices, dividend growth, and Warren Buffett.

As long as crude prices rally further or even hold up at current levels, Chevron will continue to mint money. Aside from investing in growth and strengthening its balance sheet, a large chunk of all that incremental cash should end up in shareholders' pockets through share repurchases and dividends. That also means Chevron will most likely announce a decent dividend hike in early 2022 to support its 3% yield. In between, if Buffett keeps buying Chevron stock as he has so far this year, it could encourage investors looking for exposure in energy to place bigger bets on the oil stock.