Shares in Suncor got a boost after investors learned that Berkshire Hathaway bought over 10 million shares in the company during the final quarter of 2018.  Suncor photo.

Warren Buffett’s investment company bought 10.8 million Suncor shares

Warren Buffett’s investment firm Berkshire Hathaway bought 10.8 million shares of Canadian oil sands company Suncor during the final quarter of 2018, according to an SEC filing.

Following the report of the filing, the oil company’s stock was up Thursday as much as 4 per cent.

In the final quarter of 2018, the Calgary-based company reported a net loss, but the operating result was positive at C$580 million.  The largest Canadian oil sands company also reported record-breaking production of 740,800 barrels of heavy crude per day and record refining at 467,900 barrels per day in the fourth quarter.

Suncor has been a vocal opponent of the Alberta government’s decision to impose mandatory output reductions on the Alberta oil companies that produce at least 10,000 barrels per day to help cut the oversupply of heavy crude and stabilize oil prices.

“Our position is that government intervention in the market would send the wrong signals to the investment community regarding doing business in Alberta and Canada. And we really do need to take a long-term view and allow the market to operate as it should,” said a Suncor spokeswoman.

Last December when the Notley government announced the production restraints amounting to 325,000 b/d, the discount for some Canadian crude was as high as US$50/barrel compared to West Texas Intermediate.

In late January, Premier Notley announced the production cuts worked to cut the glut and her government would drop the production cuts to 75,000 b/d.

Suncor CEO Steve Williams said during the company’s 2018 financial results conference call that negative unexpected consequences of the Alberta government policy are now playing out.

“The differential corrected and overcorrected very quickly and the unintended consequence of that is the potential, the economics are seriously damaged and a lot of the rail movements are stopping or have stopped,” Williams said during the call.

The Alberta government’s decision to limit production is not the only factor in reduced supply of heavy crude.  Venezuela has struggled with falling production for years and recently, the Trump administration slapped Venezuelan crude exports with sanctions, further impacting the world’s supply.