- Last week Berkshire Hathaway held their annual meeting.
- Asked about his oil investments, Warren Buffett said “we’re going to need a lot of hydrocarbons for a long time, and we’ll be very glad we’ve got them.” “If we owned the whole company (Chevron), I wouldn’t feel uncomfortable.”
- Buffett also addressed questions on climate change: “What’s happening, will be adapted to over time, just as we’ve adapted to all kinds of things.”
- For now, investors remain underexposed to the oil sector. It reminds me a bit of when Wayne Gretzky said skate to where the puck is going.
- Last week Goldman Sachs suggested the puck was moving into the oil & gas sector. They came out and said they expect oil to go to $80 per barrel in the next six months. “The magnitude of the coming change in the volume of demand — a change which supply cannot match — must not be understated”
- I don’t know if that is correct or not, but for now, the sector has been the place to be.
- The chart below is a daily chart of the iShares Capped Energy Index which trades on the Toronto Stock Exchange. After taking a position last November, XEG has been going through a well behaved consolidation since Mid-March. We may add to this sector in the coming weeks.