Berkshire Hathaway Discloses $4.5 Billion Stake in Phillips 66

In an SEC Form 4 filing after the market closed on Friday, August 28, 2015, Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) disclosed a $4.5 billion stake in Phillips 66 (NYSE:PSX).  Berkshire now holds 58 million shares of PSX, representing almost 11% of its outstanding shares.  Approximately 3 million of these shares were purchased during August 26 – 28, 2015 at prices ranging from $71 to $77 per share.  PSX closed Friday at $77.23.  Berkshire held a 7.5 million share position in PSX as of March 31, 2015, but apparently received confidential treatment on its investment in PSX as of June 30, 2015.  Previously, Warren Buffett, Ted Weschler and/or Todd Combs, had invested in PSX.  Since Berkshire’s additional investment in PSX this week resulted in an ownership stake of 10%, it was required by the SEC to disclose its stake.

PSX is the largest U.S. oil refiner.  Since the price of oil fell by half last year, gasoline demand in the U.S. has surged to an 8-year high as the price per gallon has fallen below $3.  Many non-refining businesses within PSX, such as its midstream unit, are substantial and stand to benefit if currently beaten-down oil and natural-gas prices rebound.