In recent weeks oil prices have tanked leading to some overvalued energy stocks. Through the first week of May, crude oil prices declined for three consecutive weeks in what amounts to the biggest pullback since November 2022. In the first week of May alone, the price of West Texas Intermediate crude oil, the U.S. standard, fell 7% and slipped below $70 per barrel. The primary reasons for the decline are growing fears of a recession and demand concerns. U.S. investment bank Goldman Sachs (NYSE:GS) recently issued a note to clients saying that the selloff in oil has been “overblown.” Those comments seem to have done little to reverse the slide in crude oil prices.

This is bad news for leading energy companies that posted record profits in 2022 as crude prices rose above $120 per barrel. Stocks of oil companies were some of the best performers on Wall Street and many became overhyped energy stocks as a result. Now the trend is reversing, leaving many investors scrambling to get out of their energy positions. Here are three energy stocks to avoid now until oil prices start to recover.

Occidental Petroleum (OXY)

Shares of Occidental Petroleum (NYSE:OXY) slumped 2% on May 8 after legendary investor Warren Buffett said that he doesn’t plan to take full control of the oil giant. Speaking at the annual meeting of his holding company Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), Buffett said “We will not be making any offer for control of Occidental… We wouldn’t know what to do with it.” Those comments poured cold water on investors who have followed Buffett into OXY stock over the past year, driving the share price higher in the process.

Owing largely to Buffett steadily increasing his stake in Occidental Petroleum to 23.5%, OXY stock more than doubled in 2022 and was the best-performing security in the S&P 500 index last year. In the process, Occidental became arguably the most overhyped energy stock. The wind now appears to have come out of Occidental Petroleum’s sails with the share price down 20% over the last six months. News that Buffett doesn’t plan to takeover the oil company is likely to further depress the share price.

British Petroleum (BP)

The good times also seem to be over for oil giant British Petroleum (NYSE:BP) and its shareholders. BP stock recently took a turn for the worse after the company announced that it is cutting back its stock buyback program as prices for crude oil continue to retreat. BP announced a new share repurchase program of $1.75 billion, which is 36% less than the previous $2.75 billion stock buyback plan that the company completed on April 28 of this year.

Shares of BP fell 5% on news of the reduced buyback, which completely overshadowed the company’s latest earning results. BP reported a first-quarter profit of $4.96 billion, which was better than a profit of $4.30 billion expected among analysts who cover the company. Despite the earnings beat, BP’s latest profit report was down 20% from a year earlier when crude oil prices surged following Russia’s invasion of Ukraine.

BP posted record annual profits of $27.7 billion last year, more than double its 2021 profit, leading to much hype around the stock. However, the company’s share price is now at the same level it was at to start 2020, before the Covid-19 pandemic hit.

Chevron (CVX)

American oil giant Chevron (NYSE:CVX) is another company that rode elevated crude prices to record profits last year only to see its fortunes reverse in recent months. The company recently reported a first-quarter profit of $6.57 billion, which beat Wall Street consensus estimates. However, the latest profit was due almost entirely to its oil refining business, where higher margins helped income grow. The company’s oil and gas production unit saw its net profit fall 25% in Q1 as prices for crude oil slumped.

Furthermore, Chevron said it ended Q1 with $15.8 billion in cash, down 12% year-over-year, and that its output fell 3% in the first three months of the year when compared to 2022. The earnings print did nothing to help CVX stock. Over the past six months, Chevron’s share price has pulled back 14%. Over the last 12 months, the stock is flat. Like OXY stock, Chevron benefited from disclosures showing Warren Buffet bought its shares during 2022. However, Buffett recently disclosed that he sold $6 billion worth of Chevron stock in Q1.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.