Warren Buffett’s Berkshire Hathaway has been increasing its investment in Occidental Petroleum. In June, the company bought over $435 million more of Occidental’s stock. Occidental Petroleum is a large oil and gas producer.
It has operations in the Middle East, North Africa, and the United States. The company also has a carbon capture business called Oxy Low Carbon Ventures. Buffett’s investment in Occidental started in 2019.
He invested $10 billion to help finance Occidental’s purchase of Anadarko Petroleum. The COVID-19 pandemic in 2020 led to a drop in oil prices. This forced Occidental to cut its dividend and focus on strengthening its finances.
Since then, Occidental has been growing again. The company is regularly raising its dividend and making acquisitions. It plans to buy CrownRock for $12 billion this quarter.
Energy analyst Ben Cook says Occidental is an easy way to invest in U.S. oil. Higher oil prices are helping the company reduce debt, buy back stock, and raise dividends. Other billionaires are also investing in energy stocks.
Buffett’s increased Occidental investment
Carlos Slim’s investment company has put $150 million into PBF Energy since January. PBF Energy is a leading independent energy refiner in the U.S. It operates six refineries, pipelines, and storage facilities.
The company has been paying down debt and covering environmental liabilities. It now has more cash than debt. This positions PBF to increase shareholder returns through buybacks and dividends.
Analysts see several reasons why energy stocks are attractive now:
1. Recession fears have pushed energy stock prices down, making them a good value. 2.
OPEC is expected to keep restraining oil production to support prices. 3. The growth of AI is increasing demand for electricity and diverse energy sources.
4. Portfolio managers heavily invested in tech stocks may look to diversify into energy. 5.
Natural gas prices are expected to stay strong due to increased cooling demand and low storage levels.
