The Los Angeles oil and gas company should enjoy increased profits in 2011 and 2012 thanks to higher oil prices, but analyst Faisel Khan said a 37.6 percent jump in stock value since early October is still hard to justify.

"We are unable to recommend the stock at current levels," Khan said.

Khan downgraded the company to "Neutral" from "Buy" while boosting his price target for the company to $100 from $86 per share. Khan also increased earnings estimates for Occidental to $8.35, $9.03 and $10.66 in 2011, 2012 and 2013, respectively. Those are up from previous estimates of $7.91, $6.61, and $8.59 per share, respectively.

Occidental and other petroleum companies should see profits rise along with oil prices, Khan said. While energy demand remains weak, a continued disruption in Libyan exports, low European stockpiles and global tensions should keep supplies tight and oil prices high, he said.

Brent crude, which is used to price foreign oil that's imported by U.S. refineries, is expected to sell at an average of $110 per barrel in 2012, up from a previous estimate of $86 per barrel, Khan said.

Shares of Occidental Petroleum Corp. fell $1.80, or 1.9 percent, to $92.60 in premarket trading, following a similar drop in oil prices. Brent crude lost 94 cents to $107.53 per barrel while benchmark crude fell $1.50 to $97.91 per barrel.