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
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
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
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