Warren Buffett expands oil bet, buys more Phillips 66 shares

Warren Buffett is expanding his bet on the oil industry, slowly adding to his already large stake in oil refiner Phillips 66 even as crude oil prices have sunk to a 12-year low.

From January 4 to January 11, the billionaire's investment company Berkshire Hathaway, which he has run since 1965, paid about $US390 million ($558 million) for an additional 5.1 million shares of Phillips 66, according to filings with the US Securities and Exchange Commission.

In it for the long haul: Billionaire investor Warren Buffett has upped his bet on the oil industry.
In it for the long haul: Billionaire investor Warren Buffett has upped his bet on the oil industry. Photo: Nati Harnik

The purchases boosted Berkshire's investment in Phillips 66 to 65.68 million shares, or about 12.3 per cent of those outstanding, worth $US5.21 billion as of Thursday's market close.

Phillips 66 shares closed up $US4.03, or 5.4 per cent, at $US79.28 on the New York Stock Exchange.

Berkshire began quietly rebuilding its stake in Houston-based Phillips 66 early last year, after having in February 2014 swapped $US1.35 billion of shares for a chemicals business that it folded into its Lubrizol unit.

Crude oil prices have slumped by nearly three-quarters since June 2014 as traders and investors worried about flagging global growth and a surfeit of demand.

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The Brent crude benchmark rose 69 US cents on Thursday to $US31 a barrel, after earlier falling to a 12-year low of $US29.73.

Phillips 66 shares have held up better than many others in the oil sector, closing on Thursday just 16 per cent below their record high set on November 4.

Its shares began trading in 2012 after a spinoff by ConocoPhillips, which Berkshire also owned. Two years later, Berkshire shed its remaining Conoco stake, as well as a large investment in Exxon Mobil.

Berkshire also owns close to 90 businesses such as the Geico auto insurer, the BNSF railroad and See's Candies. It also owns dozens of stocks including American Express, Coca-Cola, IBM and Wells Fargo.

Reuters

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