Warren Buffett Increases Stake in Occidental Petroleum After Regulatory Clearance to Buy 50%

Warren Buffett bought more Occidental Petroleum (OXY) shares after his Berkshire Hathaway (BRKB) has received regulatory approval to buy up to 50%. The share of OXY rose slightly late on Friday.


Berkshire Hathaway now owns 26.8% of Occidental Petroleum, according to a regulatory filing Friday night. That came just a month after Warren Buffett’s company announced that its OXY stock stake had hit 20.2%. Exceeding the 20% ownership level means Berkshire Hathaway can record western earnings in its books.

The Federal Energy Regulatory Commission has authorized Berkshire Hathaway to purchase up to 50% of Occidental Petroleum. That’s according to an order made public on August 19. Berkshire made the request on July 11.

There is speculation that Berkshire could choose to buy all of Occidental, although The Wall Street Journal, citing sources, reported last month that Warren Buffett was unlikely to do so.

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OXY Shares Rise After Buffett Buys

OXY shares were up 1.6% in late trading Friday. For the week, Occidental Petroleum stock fell 4.6% to 65.61, though it found support from its 50-day moving average.

OXY stocks broke out of a head-to-head base on Aug. 19 on news that Buffett had approval to buy 50% of the company. Shares rose to a record 77.13 on Aug. 29, but have already hit that buy point gain of 66.26.

Western stocks had held up better than many oil producers over the summer, thanks to Warren Buffett’s steadily adding stock. But OXY stocks have come under pressure as crude oil prices have fallen significantly.

Meanwhile, BRKB share rose 2.9% to 285.77 last week. That followed three weekly declines, which started a major reversal from the 200-day moving average.

Follow Ed Carson on Twitter at @IBD_ECarson for stock updates and more.

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