The price of crude has been rallying since OPEC announced recently that it would cut production by 1.2 million barrels per day starting in January, which will mean that the oil market will no longer be oversupplied for the first time in years.

What is the best way for you to profit from this trend? Big oil companies such as ExxonMobil and Chevron can certainly be good investments for the long haul. But you may do even better with Occidental Petroleum (OXY) , a big company that combines stability and adaptability.

Occidental Petroleum is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells OXY? Learn more now.

That's an attractive combination for investors. Occidental shares fell 0.8% during Tuesday's session. 

Occidental Petroleum has a diverse portfolio of assets, including shale, enhanced oil recovery operations, and conventional oil and gas assets in the Middle East. It also has a substantial presence in the chemicals industry, which allows it to continue to make money even if oil prices unexpectedly slump.

But even at its considerable size (its market cap is almost $55 billion), it still has a lot of growth potential. Because of its well-established operations in the Permian Basin (an oil-rich area in Texas and New Mexico) Occidental believes it can increase its production by 5% to 8% per year over the long term. Occidental's shale business should provide it with ample cash flow, as well.

Occidental also has a healthy dividend yield of more than 4%. The company was able to maintain this dividend despite the downturn in crude oil prices in recent years.

While the company's last earnings report showed a loss, this was before oil prices began their rebound. The report included some positive news, as well.

Occidental achieved the high end of its production goals, thanks to increased well productivity in the southwestern U.S., plus record production in Abu Dhabi and Oman. It also ended the third quarter with $3.2 billion in cash, which will allow it to move quickly to take advantage of higher prices.

The firm recently disclosed that it has acquired substantial new land in the Permian Basin from private sellers. These transactions further complement and solidify Occidental's dominant position in that part of the market. The total purchase price was about $2 billion, funded from cash on hand.

Occidental is a good option for investors.

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Tom Scarlett is an independent contributor who at the time of publication owned none of the stocks mentioned.

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