Follow-up: Will Warren Buffett Buy an Oil Company?

I asked that question in the beginning of January here. Buffett had been famously sitting on over $50 billion in cash and valuations had broadly collapsed across the XLE and XOP names.

Oil stocks have come back some since then but Warren Buffett was not a buyer. In fact, we learned this week that he had been selling out his entire position in Exxon Mobil during the 4th quarter – 41 million shares that had been acquired since 2013. That’s quite a big about-face for the Oracle in a short period of time. My guess is that when prices started to collapse, he changed his mind on the long-term benefit of being so heavily invested in oil. He’s still got a ton of exposure to the space thanks to Berkshire’s ownership of the Burlington Northern Santa Fe railroad, which trucks hundreds of thousands of cars loaded with crude out of the Bakken Shale each year.

So no, Buffett wasn’t a buyer, he was a seller.

That being said, Berkshire did up its holdings in Canadian producer Suncor Energy, adding 3.8 million shares.

 

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