Warren Buffett regrets $10B bet on oil
Corbin Hiar, E&E News reporterPublished: Tuesday, May 5, 2020
https://www.eenews.net/stories/1063050681
“It was attractive at oil prices that then prevailed,” Buffett said of Berkshire's Occidental bet. “It doesn't work, obviously, at $20 a barrel. It certainly doesn't work [at] minus $37 a barrel.”
The famous investor predicted that “oil production is going to go down a lot in the next few years because it does not pay to drill.”
I’ve been investing in energy for 40 years and this is an interesting time as oil companies have adjusted to Biden. Things went great for energy under Obama too.
A heavy majority oil companies are profitable at prices from $55 on up so there’s a nice cushion underpinning them at this time.
At least Democrats are good for somebody’s business besides BLM and Antifa.
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I’ve spent more than 40 years in the downstream side of the oil business from drilling, completions and production to finance, economics and marketing and said this last year and the year before that. We have gone through years of useful under-investment and the shale “miracle” is only good for a short time before significant declines.
Every single time in the last 50 years we have under-invested the price of oil skyrockets until demand is stifled by price and / or production catches up. This time it is worse though, we are seeing backs turned on oil investment because it is oil and not because it is a bad investment. A foolish sea-change to green / “renewable” energy is being followed just like lemmings to the sea. One foolish CEO who shall remain nameless at BP just gleefully said that better oil prices makes more money to invest in renewables. I do wonder just how much of the green abandon is for show though. Nobody would lie to us would they? A headlong rush into a green tunnel of darkness with only a solid wall to collide with at the end when the promise of renewable energy turns out just about like Texas this winter or this summer or Kalifornia this summer, don’t charge your EV. A collision at the end of a tunnel followed with no place to turn because of having forsaken the only real option to reliably fuel the world right now, OIL.
I’ve enjoyed a great few years of reckless recreational bulldozing here on the farm and see that being reigned in some soon by rising oil prices. Meanwhile, nothing beats the sound of the grunt of a slow speed engine and the smell of diesel and dirt.