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Pre-market stocks: Warren Buffett buys big again

Now, with many other investors in sell mode, he is shopping.

What’s Happening: Buffett’s Berkshire Hathaway just revealed it bought nearly 121 million HP shares worth about $4.2 billion, giving Buffett more than 11% stake in the technological society.

resume (HPQ) shares rose 14% in premarket trading on Thursday.
It’s the latest in a series of major purchases that Buffett has made over the past month. In March, Berkshire increased its stake in western oil (OXY) and announced an agreement to buy Alleghany Corporation, an insurer, for $11.6 billion.

Take a step back: Buffett, known for his love of bargains, complained about not spotting good investment opportunities for Berkshire Hathaway.

“We find few things that excite us,” he wrote in a letter to shareholders in February.

That put him out of a trading frenzy during the economic recovery from the coronavirus. Last year, low borrowing costs helped push mergers and acquisitions to a record high.

But now, with the war in Ukraine and worries about how quickly the Federal Reserve will withdraw support for the economy weighing on stocks and trades, he seems more inclined to spend big.

How Buffett Measures Up: Buffett’s conservatism generated a lot of chatter last year. Where was the Oracle of Omaha, and what was he waiting for? But Berkshire Hathaway shares still rose nearly 30%, while the S&P 500 soared 27%.

This year, Berkshire looks even better. Its stock is up 15%. The S&P 500 has fallen 6% since the start of the year.

One of the main reasons is Buffett’s continued commitment to the energy sector, even as other top investors try to give their portfolios a green makeover. Shares of energy companies have soared this year as oil, gas and coal prices soared.

In addition to its nearly 15% stake in Occidental Petroleum, Berkshire owns a portion of Chevron (CLC) Stock. Shares of Occidental jumped 96% in the first quarter, while Chevron soared nearly 40%.

Berkshire also has a huge energy subsidiary that owns leading electric utilities like PacifiCorp and MidAmerican, oil and gas pipelines, and several renewable energy companies.

Greg Abel, the Berkshire vice chairman who oversees Berkshire Energy and the company’s other non-financial businesses, was tapped last year to eventually succeed Buffett – now 91 – as Berkshire CEO. .

US oil falls below $100 a barrel

Oil prices are still extremely high. But this week there has been some relief as the West draws more on its emergency reserves.

The latest: The Paris-based International Energy Agency announced on Wednesday that member states would supply the oil market with an additional 60 million barrels of crude from emergency stocks.

The news sent oil prices down more than 5%. U.S. crude futures fell to $96 a barrel. Brent, the global benchmark, fell to $101 a barrel.

The 60 million barrels will be added to the record 180 million barrels of oil that President Joe Biden recently announced would be released from US reserves. The United States plans to release 1 million barrels per day over the next six months.

The measures are designed to help the world wean off Russian supplies. The IEA said Russia could be forced to cut production by 3 million barrels a day this month as it struggles to find buyers following the invasion of Ukraine.

Gasoline prices have fallen since the announcement of the withdrawal of reserves. On Thursday, a gallon of gasoline cost an average of $4.15 in the United States, down from $4.23 a week ago.

But the drop is unlikely to allay concerns among consumers, who a year ago were paying an average of $2.87 a gallon.

Members of Congress questioned Big Oil executives about soaring gasoline prices during a hearing on Wednesday. They demanded to know why producers were not moving faster to increase production.

“Gas prices cannot continue to depend on the whims of autocrats like Putin who can weaponize oil against us,” said Rep. Raul Ruiz, a California Democrat.

Leaders said they were doing what they could but faced a lack of equipment and a shortage of manpower. They also resisted calls from Democrats to scrap shareholder rewards like dividends and buyouts during the war in Ukraine.

Shell’s exit from Russia cost up to $5 billion

When Shell (RDSA) announced that he was leaving Russia, it was clear that it would be expensive. But the pullout will be even more expensive than initially expected by the oil giant, an indication of how the war in Ukraine is shaking global businesses.
It just happened: Shell said on Thursday it would write off up to $5 billion as a result of the ruling, more than previously disclosed. The company had said writedowns in Russia would reach about $3.4 billion.

As a $210 billion company, Shell will be able to take the hit. Also useful? High oil prices, which increase revenue and allow the company to profit from its energy trading business.

Crude prices soared to an average of more than $100 a barrel last quarter, their highest level since 2014. Shell said it expects oil trading profits to be “significantly higher “. It releases first-quarter results next month.

On the radar: Shell has not provided any details on the future of its stakes in Russian projects, including a major liquefied natural gas plant in the east.

Finding a buyer for his holdings could prove difficult as Western companies shun the Russian energy sector.

following

Conagra (GAC) and Constellation Brands (ZST) publish the results before the opening of the American markets.

Also today: US jobless claims for last week’s release at 8:30 a.m. ET.

Coming tomorrow: India’s central bank announces its latest policy decision.

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