(PatrioticPost.com)- While so much of the country is focusing on the push for electric vehicles and other sustainable energy initiatives, one of the country’s most successful leaders continues to invest in oil.
Berkshire Hathaway, the investment company led by investment guru Warren Buffett, has been increasing its position in Occidental Petroleum in recent weeks. Berkshire executed a large purchase of the oil producing company recently, bringing Buffett’s company’s stake in Occidental up to 22.2%.
Berkshire Hathaway has also received regulatory approval that would allow it to eventually acquire half of Occidental Petroleum’s outstanding shares.
The latest purchase Berkshire Hathaway executed of Occidental Petroleum included 5.8 million shares at a price of $355 million. Before the purchase, Berkshire Hathaway already owned 21.4% of the company. After the purchase, it owns more than 200 million total shares in the company, or 22.2%, which is worth roughly $12.2 billion.
Occidental Petroleum now represents the seventh-largest company holding for Berkshire Hathaway. It represents 3.7% of its total portfolio.
Roughly a year ago, Berkshire Hathaway started gobbling up shares of Occidental Petroleum, which might sound odd considering so much of the focus on the energy industry – at least from the Biden administration – is on “going green” and moving away from traditional energy sources such as oil.
Yet, Buffett seems to be more focused on the actual price of oil and the fact that it’s going up, rather than where President Joe Biden and others would like for the energy industry to go in the future.
Prices of crude oil soared about a year ago, but then cooled down over the last few months. When that cooling occurred, Berkshire put a pause on additional purchases of Occidental Petroleum.
The prices of crude oil is projected to rise once again during the upcoming summer, so Buffett is seemingly trying to get ahead of the curve by buying up oil shares now before the projected spike in price.
According to the International Energy Agency, or the IEA, oil demand should grow by 2 million barrels every day in 2023, reaching a record-high 101.9 million barrels per day. China is actually one of the biggest drivers in that increased demand.
As the global travel industry recovers to levels seen before the COVID-19 pandemic, demand for jet fuel is expected to rise considerably as well.
At the same time, the IEA has projected that supply of crude oil will be tight for 2023. The agency said recently that it expects output would increase only by roughly 1.2 million barrels per day, mainly due to the economic sanctions put on Russia by many western countries.
With demand expected to considerably outpace supply, that could only result in one thing – increased prices starting in the second half of 2023. Many experts in the oil industry are predicting that prices for crude oil could reach $100 per barrel at some point this summer.
