Warren Buffett Has Started Buying Oil Stocks Again

February 1, 2016, 4:15 PM UTC
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Berkshire Hathaway (BRKA), the conglomerate run by Warren Buffett, has resumed its purchases of Phillips 66 stock, and spent roughly $832 million in January to boost its stake even as the oil refiner’s profit margins narrowed.

According to a regulatory filing on Friday night, Berkshire paid about $198 million this week for 2.54 million Phillips 66 shares, its first purchases of the stock since Jan. 14.

For all of January, Berkshire bought 10.81 million shares, giving it 72.29 million overall, or a roughly 13.7 percent stake in Houston-based Phillips 66. Those shares were worth $5.79 billion as of Friday’s market close at $80.15.

Phillips 66 is Berkshire’s sixth-largest stock holding, regulatory filings show.

On Friday, Phillips 66 said quarterly net income fell 43 percent from a year earlier to $650 million, or $1.20 per share.

The decline resulted in part from lower crack spreads, or the difference between the cost of oil and the price of refined products, and asset writedowns resulting from low commodity prices.

Excluding items, Phillips 66 reported profit of $1.31 per share, topping analyst forecasts.


Berkshire previously invested in ConocoPhillips, which spun off Phillips 66 in 2012.

In February 2014, Berkshire swapped much of its Phillips 66 stock back to the company for a chemicals business. It began rebuilding the stake early last year.

Berkshire announced the new Phillips 66 purchases a few hours after the Omaha, Nebraska-based company completed its largest acquisition, a roughly $31.7 billion purchase of industrial components maker Precision Castparts Corp.

Buffett has said Berkshire would spend about $23 billion of cash on that acquisition, and finance the rest. (Reporting by Jonathan Stempel in New York; Editing by Bernard Orr)