Against an incredibly dour equities market backdrop, oil firm Occidental Petroleum (NYSE:OXY) managed a positive return in the afternoon session. Still, OXY stock gyrated significantly to get there. Driving the kinesis for the hydrocarbon player was Warren Buffett. Through Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), the legendary investor acquired just under 6 million shares of OXY. In doing so, Berkshire’s stake in the energy company is now 20.9%.
According to regulatory filings, the conglomerate spent about $350 million on the purchases of OXY stock. The acquired per-share price ranged from $57.91 to $61.38. According to Barron’s, “Berkshire needs to file a form 4 with the Securities and Exchange Commission within two business days when it buys or sells stock in Occidental Petroleum because it holds more than 10% of the company.”
Following the transactions, Berkshire holds 194.4 million shares of OXY stock, worth about $11.9 billion. In August of this year, “a U.S. energy regulator gave Berkshire permission to buy up to 50% of Occidental’s common stock,” according to a Reuters report.
On a year-to-date basis, OXY stock nearly doubled amid various cynical tailwinds, such as rising inflation and geopolitical flashpoints.
The Oracle Buys the Dip in OXY Stock
Buffett, known as the Oracle of Omaha, may have taken his own advice regarding OXY stock. Previously, he advised investors to be “fearful when others are greedy, and greedy when others are fearful.” Thus, when OXY began slipping since late August, Buffett may have sensed an opportunity.
According to Barron’s, some speculation exists that “Berkshire was a buyer of Occidental in recent sessions because its stock moved below $60 a share for the first time since early August when Berkshire last bought stock in Occidental.”
Further, rumors indicate that “Berkshire ultimately wants to buy the rest of Occidental — which could cost over $60 billion at a price of more than $80 a share.” Notably, Buffett appreciates Occidental CEO Vicki Hollub. He also prefers investing in American companies.
Should Berkshire acquire additional shares of OXY stock, the move would align with strong fundamental undercurrents. One of the biggest catalysts for higher hydrocarbon energy prices is Russia’s invasion of Ukraine. Subsequent retaliatory maneuvers saw Russia cutting critical energy outflows to Europe.
Also, Reuters reported World Bank president David Malpass warned that “it could take years for global energy production to diversify away from Russia after its invasion of Ukraine,” thus prolonging the risk of stagflation. Cynically, then, OXY stock may benefit from extended relevance.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.