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Warren Buffett, Billionaire Investor, Acquired 9.5 Million Shares of Occidental Petroleum After Recent Oil Drop
After the recent drop in oil prices, billionaire investor Warren Buffett was once again taking advantage of the moment to acquire new shares. In the week of June 25, his investment conglomerate Berkshire Hathaway spent US$ 530 million (R$ 2.7 billion) buying 9.5 million shares of oil company Occidental Petroleum, one of his preferred energy companies.
After a wave of acquisitions that started in late February, Buffett’s investment conglomerate currently holds about 152 million shares of Occidental Petroleum, a stake of 16.3%, equivalent to nearly US$ 8.5 billion (R$ 44.2 billion), making Buffett’s conglomerate the largest shareholder of the oil company.
However, contrary to expectations, the shares of Occidental Petroleum did not rise with Buffett’s investment announced this Thursday, the 23rd. Despite the stability of the shares, the oil company remains one of the top performers in 2022, as its shares have gained more than 90% due to rising oil prices, which maintained their high until mid-June.
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Although oil has seen exponential appreciation, with its price soaring to nearly US$ 140 (R$ 728) per barrel since the outbreak of the war in Russia at the end of February, fuel prices have declined this month, and the shares of oil companies have reduced some of their significant gains from early 2022.
Oil Prices Fell in June
Oil prices have been declining since last Thursday, the 23rd. For West Texas Intermediate, the U.S. benchmark price was approximately US$ 105 (R$ 546) per barrel, down from over US$ 120, or R$ 624, at the beginning of June. Meanwhile, Brent oil, the international benchmark, was trading at US$ 110, R$ 572, per barrel.
Buffett says that rising oil and gas prices won’t end anytime soon and also reveals that he has been using the recent oil price fluctuations as investment opportunities.
Oil Companies Achieve Satisfactory Results Despite Falling Oil Prices
Oil companies in the S&P 500 have performed better amid the widespread drops in oil prices that have occurred this year, gaining more than 20% while the index has lost 20%. While some experts agree that oil companies are making hefty profits, others say that oil prices may have peaked and could start to decline next year.
As senior market analyst at Oanda, Edward Moya, says, “oil volatility will remain high now that opposing views on prices are emerging for the end of the year.” Oil prices are facing fears of a global fuel crisis and also amid high inflation.
Berkshire’s other favorite oil company is Chevron, whose shares have risen more than 18% in 2022. With a stake of approximately US$ 26 billion, around R$ 135.2 billion, it is one of the companies that make up the majority of Buffett’s portfolio, ranking behind only Apple and Bank of America.
Buffett ranks ninth among the richest people in the world, with a net worth of US$ 92.1 billion, approximately R$ 478.9 billion, according to Forbes estimates.
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