Warren Buffett's Berkshire Hathaway Inc. sees a green light at the intersection of low oil prices and record driving.
In its most significant energy investment in two years, Berkshire has amassed a $4.5 billion stake in Phillips 66, making it the biggest shareholder in the largest U.S. oil refiner. Berkshire owns almost 58 million shares in Phillips 66, more than 10 percent of the total outstanding, up from the 7.5 million it reported at the end of the first quarter, according to a regulatory filing issued late Friday by the Omaha, Nebraska-based company.
The bet on fuel processing is a wager that an unexpected and significant rally by refiners during the shale boom will continue as low oil prices spur demand for gasoline, diesel and other petroleum products produced by the so-called downstream sector. Since oil fell by half last year, gasoline demand in the U.S. has surged to an 8-year high, as drivers see per-gallon prices fall below $3 and take to the road.
See Tuesday's Arkansas Democrat-Gazette for full coverage.