Why Warren Buffett has just invested $300 million in this stock

Warren Buffett, revered as one of the world’s foremost stock investors, continually captivates the attention of millions with his strategic moves in the financial markets. 

On Thursday, December 21, the investment maestro made waves once again as regulatory filings unveiled his latest significant move—a whopping $312 million investment in one of his favorite energy stocks, Occidental Petroleum (NYSE: OXY). 

Berkshire Hathaway buys over 15 million OXY shares in a week

According to new securities filings, Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) bought 5.2 million shares of Occidental Petroleum, taking its total stake in the oil firm to 27.7%. 

Notably, the investment juggernaut invested roughly $312.1 million in OXY between December 19 and December 21, a filing with the SEC showed. 

The move comes roughly a week after Berkshire Hathaway bought almost 10.5 million OXY shares for around $588.7 million following its agreement to acquire shale oil producer CrownRock for $12 billion. 

Buffett’s and Berkshire’s interest in Occidental dates back to 2019, when the conglomerate first invested in the company amid its bidding war with Chevron Corp. (NYSE: CVX) to buy Houston rival, Anadarko. 

Last year, Berkshire’s appetite for energy and oil stocks increased in the wake of Russia’s invasion of Ukraine. In August 2022, the investment firm secured approval to buy up to 50% of OXY shares, prompting speculations that Berkshire may be planning a full takeover. 

OXY stock price analysis

At the time of writing on December 22, shares of Occidental Petroleum were sitting at $60.44, up 0.45% in the past 24 hours. 

Over the past week, the oil firm’s shares advanced around 3%, while its monthly gains sit at plus 0.4%. 

Year-to-date, the stock is down 1%, a stark contrast from 2022, when tough macroeconomic conditions and geopolitical tensions propelled OXY’s price by nearly 120%. 

Interestingly, that did not deter Buffett from increasing his investment in Occidental. Though it’s not certain, it seems Buffett and his team may be betting that crude oil prices will stay elevated or even rise further. Global energy companies have been cutting back on spending since the COVID-19 pandemic, resulting in a constrained oil supply.

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