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Wednesday, May 4, 2022

Crude Oil Super-Cycle Just Beginning; Buffett Buys More OXY -- May 4. 2022

Clearly in a "crude oil super-cycle." 

WTI: tonight, 10:40 p.m. CT, May 4, 2022 -- $108.20. 

Warren Buffett telegraphed this during the Annual Meeting last weekend. 

His "quote" posted on the blog.

Perfect storm:

  • energy transition is dead ("everybody" now realizes that)
  • Putin's War: a lot of Russian oil is taken off the market 
    • one-two-three punch: previously posted
  • we have an administration in Washington (DC) that doesn't understand what's going on and will (purposely or inadvertently) do everything to kill the US oil industry
    • this administration in place for three more years; three more years to exacerbate situation 
    • windfall profits tax will exacerbate price of gasoline at the pump;
  • US E&P under-capitalization (multiple reasons)
    • financial institutions coordinated moving investments to non-fossil fuel companies
    • capital being moved from fossil fuel to renewable energy, tech, healthcare
    • fossil fuel out of favor with managed funds

Tonight: link here.


Remember: during 1Q22, Warren Buffett / BRK bought enough CVX to make it the third or fourth largest equity holding in the BRK portfolio. Now, more OXY. 

Link here.

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