As Oil Prices Rebound, These Stocks Could Fuel the Next Rally

Industry Overview - The oil and gas sector has faced challenges in recent years, with Brent crude oil prices dropping to less than $65 per barrel in 2025, down from $81 in 2024 due to environmental pressures and supply-demand imbalances [1] - Despite increased global oil production, indicators suggest a potential bottom for oil prices, with significant backing from investors like Warren Buffett [2] - OPEC and OPEC+ have ramped up production since April 2025, contributing to an oversupply situation that may lead to further price declines [2] Market Performance - Brent crude futures recently increased by 0.5% to $65.15 per barrel, while the United States Oil Fund (USO) has risen over 10% in the past month, indicating mixed market signals despite oversupply concerns [3] - Technical analysis suggests a potential buying opportunity for oil and gas investors, with light crude oil futures breaking above resistance levels [5][6] Company Insights: Chevron - Chevron's stock is currently priced at $141.35, with a dividend yield of 4.84% and a P/E ratio of 14.54, indicating solid financial health [7] - The company has focused on U.S. operations, reducing risks associated with tariffs and maintaining a strong record of dividend increases over 38 years [8] - Chevron has received confidence from Warren Buffett, holding 6.8% of the company's outstanding shares as of May 2025 [9] Company Insights: Occidental Petroleum - Occidental Petroleum's stock is priced at $43.25, with a dividend yield of 2.22% and a P/E ratio of 17.74, showing a strong financial position [11] - The company has strengthened its U.S. asset holdings and reduced tariff risks by acquiring CrownRock, a Midland-based oil and gas producer [11] - Occidental has a significant backing from Berkshire Hathaway, which holds over 28% of its outstanding stock and has invested $8.5 billion in preferred stock [13]