What happened
Shares of oil giant Occidental Petroleum (OXY +1.49%) continue to soar 9.6% in morning trading Monday after Warren Buffett's Berkshire Hathaway (BRK.A 1.13%)(BRK.B 1.33%) reported purchasing an additional 18.1 million shares last week, spending almost $1 billion on the stock.
Buffett owns more than 10% of Occidental's stock, and with no end in sight to higher oil and gas prices amid rampant inflation, the energy sector has been on fire.
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So what
Energy stocks have been the best-performing sector in 2022, with exploration and production (E&P) plays like Occidental Petroleum far outperforming integrated oil and gas plays such as ExxonMobil and Chevron. The E&P star is up 94% year to date while the energy giants are 28% and 38% higher, respectively.
Oil prices are back over $110 a barrel after briefly dipping under the $100-a-barrel threshold last week.
Last Friday Barclay's analyst Jeanine Wai raised her price target for Occidental to $69 per share from $44 per share while maintaining an overweight rating, as she believes the E&P sector looks primed to capitalize on the elevated pricing atmosphere.
Now what
Berkshire Hathaway now owns more than 136 million shares of Occidental Petroleum, which after today's jump in price now values those holdings at some $8.4 billion. Buffett's holding company also owns warrants to buy another 84 million shares at an exercise price just under $60 per share.
