Warren Buffett buys more Occidental Petroleum after shares slide 18% in one month

Published Thu, Sep 29 202210:19 AM EDTUpdated Thu, Sep 29 20221:35 PM EDT

Warren Buffett's Berkshire Hathaway bought the dip in Occidental Petroleum , continuing to add to its massive stake as the legendary investor remains unfazed by the pullback in oil prices. The conglomerate added about 6 million shares of the oil giant, worth approximately $350 million, from Monday to Wednesday, paying as much as $61.37 per share, according to a regulatory filing released Wednesday evening. Berkshire's stake in Occidental has now reached 20.8% after steadily increasing the bet over the past few months. In August, Berkshire received regulatory approval to purchase up to 50%, spurring speculation that it may eventually buy all of Houston-based Occidental. Shares of Occidental retreated 18% over the past month as of Wednesday's close as oil prices dropped on rising recession fears. Meanwhile, there were also demand worries out of China, the world's largest crude importer. The ongoing lockdowns in the country have sparked fears that fewer oil and petroleum products will be needed to power its economy. Goldman Sachs "significantly" cut its oil price forecasts Tuesday amid fears of slowing economic growth. The Wall Street investment bank now expects West Texas Intermediate crude to average $95 per barrel during the fourth quarter of 2022. On Wednesday, the contract traded around $82 per barrel. Still, Occidental is the best-performing stock in the S & P 500 in 2022, up more than 110%. Retail investors also followed Buffett's lead, pushing shares higher. Berkshire also holds warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each. The warrants were obtained as part of the company's 2019 deal that helped finance Occidental's purchase of Anadarko . The Berkshire stake in Occidental would rise to 27.4% if it exercised those warrants. Some Buffett watchers expect even more buying if Occidental pulls back. "That happens to be where his purchases in early August were also made, and we'd expect to see more of this the next time OXY dips," Don Bilson of Gordon Haskett said in a note.