Warren Buffett said crude oil will rise far above its current price and that he made a mistake when he purchased ConocoPhillipsstock last year for his Berkshire Hathaway Inc.
“I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price,” Buffett wrote in his yearly letter to shareholders. He also said he made a “major mistake” when he bought a “large amount of ConocoPhillips stock when oil and gas prices were near their peak.”
Buffett’s Berkshire Hathaway today posted a fifth-straight profit drop, the longest streak of quarterly declines in at least 17 years, on losses from derivative bets tied to stock markets. Fourth-quarter net income fell 96 percent to $117 million, or $76 a share, from $2.95 billion, or $1,904 a share, in the same period a year earlier, the Omaha, Nebraska-based firm said in its annual report.
In 2007, Berkshire reported record earnings as Buffett booked a $3.5 billion profit cashing out of a $500 million investment in oil producer PetroChina Co.
Buffett wrote today that “the terrible timing” of his ConocoPhillips purchase cost Berkshire “several billion dollars.” According to figures given in the letter, Berkshire Hathaway purchased the ConocoPhillips stock for $7.01 billion. As of Dec. 31, the stake was valued at $4.4 billion.
Crude oil for April delivery fell 46 cents, or 1 percent, to settle at $44.76 a barrel at 2:50 p.m. on the New York Mercantile Exchange yesterday. Prices are up 7.4 percent this month and 0.4 percent so far this year. Futures have dropped 70 percent from the record $147.27 a barrel reached on July 11.
No comments:
Post a Comment