Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
In the past five days, the S&P 500 index fell by 0.17%, with the technology sector showing more significant declines as the Technology Select Sector SPDR ETF (XLK) dropped by 2.23%. In stark contrast, the energy sector rose against the trend, with the Utilities Select Sector SPDR Fund (XLU) surging by 2.20%.
Specific to individual stocks, Baker Hughes (NASDAQ:BKR) saw its stock price soar by 7.25% over the past five trading days, Exxon Mobil (NYSE:XOM) rose by 4.60%, Diamondback Energy Inc (NASDAQ:FANG) increased by 4.28%, Marathon Oil Corp (NYSE:MRO) went up by 4.28%, and EOG Resources Inc (NYSE:EOG) surged by 4.25%.
There have been signs of U.S. energy stocks rising against the trend for some time, with several prominent investors having previously increased their bets on oil and gas stocks.
For decades, Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) chairman and CEO Buffett has adhered to a cautious investment strategy, favoring retail and banking stocks. Therefore, when Warren Buffett invested against the trend in the more volatile energy sector around 2020, as Wall Street completely shunned it, the market was taken by surprise.
Last year, Buffett established a $4.1 billion position in Chevron (NYSE:CVX), acquiring nearly a 2.5% stake, making the oil giant Berkshire’s tenth largest holding. Following this, Buffett’s energy investments became unstoppable, continuing to make substantial investments in oil and gas stocks. As of the 17th of this month, Berkshire Hathaway invested an additional $434.8 million to increase its holding of Occidental Petroleum (NYSE:OXY) stock.
Buffett’s series of short-term increases in oil stocks have sparked curiosity. Besides the fundamentals of individual stocks, he is actually optimistic about the industry. At a previous Berkshire shareholders’ meeting, Buffett mainly attributed his decision to concerns about oil reserves and future uncertainties. He stated that oil is both scarce and strategically significant, and the market’s pessimism has created good bargains and opportunities for bottom fishing.
Buffett’s partner Charlie Munger also remarked that oil would still be a valuable resource in the next 200 years, and oil assets even have more investment value than U.S. treasuries. Berkshire’s judgment is very clear: in the short term, new energy cannot replace traditional energy, and only traditional energy can provide security for the country and capital.
Ben Cook, an energy analyst, noted that many energy companies are reducing debt, repurchasing stocks, and raising dividends. Moreover, he predicts that for the remainder of this year and next, WTI crude oil prices will range between $80 and $85 per barrel, a price level at which oil companies thrive. Lastly, according to Cook, the AI boom will drive high-speed growth in electricity demand, leading to an expansion of various forms of energy, making investors more optimistic about energy stocks.
