Even Warren Buffett Wants in on Our Oil Play

When was the last time you scooped the greatest investor in history?

With a commanding net worth of $115.5 billion, few would challenge that claim when it comes to Warren Buffett. 

Now, whenever we think of Warren’s favorite stocks, some of the most recognizable brands on the planet immediately come to mind. 

Coco-Cola, Kraft, Apple — you name it and there’s a good chance that he’s held shares of it at one point or another. 

But there’s one sector he’s kept coming back to, ever since he executed his first trade. 

You see, at the tender age of just 11, a young Buffett saved up enough cash to purchase six shares of Cities Service preferred stock. 

Of course, it was an oil and gas stock that went on to make him and his sister a small gain. However, it was unfortunate that Buffett sold early, because in short order he saw those shares rocket to more than $200 apiece.

So when we learned that Berkshire Hathaway scooped up a massive position in Occidental Petroleum in early March, it certainly came as no shock to us. 

If you’re asking why Warren would dive head first into Occidental in early March, there’s one simple answer…

He finally now sees what we’ve do — a perfect investment storm is coming for oil this summer. 

Brace Yourself, the REAL Oil Profits Are Coming

When asked about his grand foray back into oil’s E&P sector, Warren replied it was a bet on the Permian Basin. Remember, Occidental became one of the leading producers and the largest acreage holder in the Permian Basin. 

Buffett is betting on 1.6 million acres in West Texas to bring him a tidy profit in the future. 

Well, he couldn’t have waited any longer, especially given that oil prices have been consolidating just prior to the kickoff of the summer driving season. 

Make no mistake, the forecasts calling for record high gasoline prices will prove accurate. 

As I write this now, WTI crude is trading around $112 per barrel. Not only are prices high now, but I believe we’ll see them march higher as summer gasoline demand kicks in.

That doesn’t bode well for prices at the pump, given that crude oil prices account for up to 60% of gasoline prices. Toss in another 20–25% to transport the gasoline to where it needs to be, as well as the higher state and federal taxes that are slapped on, and we will all feel that pain in our wallets over the next few months. 

Granted, the one thing that can put a lid on oil price surges is demand destruction. However, we still have a ways to go for that to set in. 

Even the bill working its way through Congress today, which would effectively give the president the authority to make it illegal to raise gasoline prices, is not a solution. 

Truth be told, that bill is more of a disaster. 

The dirty truth that the mainstream media won’t tell you is that it’s NOT Big Oil gouging us at the pump. 

Over 60% of retail gas stations across the U.S. are owned by an individual or a family that owns a single store!

No, oil prices are far too complex to simply brush aside with the narrative that it’s just Big Oil out for more and more profits. 

Oh, don’t get me wrong — they are out for profits.

The supply/demand fundamentals are too bullish for them NOT to be raking in a small fortune… 

And that’s precisely what is going to drive our profits, and Buffett’s. 

The difference between us and Buffett, however, is that we’re going to harvest those gains at the right time. 

In the coming weeks, we’ll talk about the point at which the oil markets will peak. More importantly, we’re going to uncover a few hidden gems that are too small for Buffett’s radar yet stand to make a fortune for shareholders during this summer. 

Stay tuned. 

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

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