Oil is not dead, can Buffett's energy stocks still rise?

Goldman Sachs recently changed its stance: “Peak Oil” has been postponed by 5 years.

Previously, they predicted that global oil demand would peak in 2035, but now it's changed to 2040. What's the reason? The proliferation of solar and wind power is not as fast as imagined, coupled with the increasing electricity demand from AI data centers and the continuing fuel consumption of airplanes, while the uptake of electric vehicles is not as rapid.

Key data: Global daily oil consumption is expected to rise from 103.5 million barrels last year to 113 million barrels by 2040.

This is not just what Goldman Sachs is saying. The International Energy Agency has also pushed the “peak oil” timeline to 2050, and ExxonMobil is even more definitive, directly stating that oil and gas will still be the world's largest energy sources for the next 25 years. Even OPEC is thrilled.

Why bring up Buffett?

Berkshire Hathaway (BRK) appears to be an investment fund, but in fact, it is a treasure trove of energy businesses – directly holding stakes of $26.5 billion in Occidental Petroleum and $19 billion in Chevron, while also controlling a range of energy businesses including natural gas pipelines and lubricant brands. These energy operations contribute over $1 billion in revenue each year.

The beauty lies in the fact that, compared to directly speculating on the volatility of oil and gas stocks, positioning in energy through BRK not only provides exposure but also avoids the wild swings in crude oil prices. Goldman Sachs also predicts that next year WTI oil prices will drop to $53 per barrel, which puts pressure on drilling companies' profits, but has little impact on pipelines and service providers.

So, if you are optimistic about the oil and gas prospects for the next 20 years, BRK is actually a compromise solution.