With oil prices falling this month, billionaire investor Warren Buffett has made new energy stock purchases as investment group Berkshire Hathaway bought shares in Occidental Petroleum worth about $ 500 million this week.
Buffett’s Berkshire Hathaway bought about 9.5 million shares of Occidental shares last week for a total of $ 530 million, according to a stock listing.
Following a series of acquisitions that began in late February, Buffett’s investment group now owns approximately 152 million shares of Occidental, valued at nearly $ 8.5 billion, making Berkshire by far the largest shareholder. of the energy giant.
Occidental Petroleum shares failed to rally after the announcement of the news, but remains one of the best performing stocks this year, rising more than 90% thanks to the huge rise in oil prices this year.
Although oil prices soared this year to near $ 140 a barrel after Russia’s invasion of Ukraine in late February, prices have fallen this month, with energy stocks gaining lower earnings than in previous years. months.
Buffett bets that the rise in oil and gas prices will not end soon and uses some of the recent cuts as an opportunity to buy amid analysts’ forecasts that oil will remain well above $ 100 a barrel throughout. of summer.
The energy sector of the S&P 500 showed the best performance in the index, recording an increase of more than 20% compared to the fall of more than 20% of the benchmark. While experts agree that energy companies are “making strong profits”, others predict that oil prices may have “peaked” and could moderate by next year.
“Oil volatility will remain high now that opposing views are emerging on where prices will close this year,” said Edward Moya, senior market analyst at Oanda. Prices are “under pressure” amid fears of a global recession and high inflation, with “all short-term factors turning negative for the prospects of crude demand”.
Buffett’s other favorite energy stock is Chevron, which has risen more than 18% this year. Buffett holds a huge stake worth about $ 26 billion, one of the billionaire investor’s top stocks after those of Apple and Bank of America.
According to Forbes, Buffett is the ninth richest man in the world.
His latest investment move raises additional speculation as to whether Buffett could increase his stake in Occidental to 20% or go even further and try to buy the entire company.
Source: Capital
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