Piper Sandler Upgrades Occidental and Murphy Oil on Oil Price Outlook

Investment bank Piper Sandler has upgraded its view on Occidental Petroleum and Murphy Oil, pointing to stronger crude oil price expectations that could support earnings across the U.S. exploration and production sector. In a research note, energy analyst Mark Lear highlighted that higher oil prices tend to have a strong leverage effect on the financial performance of upstream energy companies.

According to the firm, rising crude prices can significantly improve operating cash flow and free cash generation for producers. Stronger cash flow may allow companies to accelerate debt reduction, increase shareholder returns through dividends and buybacks, and strengthen overall balance sheets.

Occidental Petroleum is one of the largest U.S. oil and gas producers, with major operations in the Permian Basin and other key regions. The company’s production levels exceed one million barrels of oil equivalent per day, making it highly sensitive to movements in global crude prices. Analysts say a sustained rise in oil prices could translate into higher margins and stronger earnings for the company.

Murphy Oil was also highlighted as a beneficiary of the improving commodity price environment. With a portfolio focused on offshore and onshore assets, the company could generate stronger cash flow if crude prices remain elevated. Piper Sandler believes continued strength in oil markets may help support valuations across the broader energy sector.