Large investment groups throw weight behind oil rally

David Wethe and Luzi Ann Javier August 15, 2018

HOUSTON and NEW YORK (Bloomberg) -- The recovery in the oil industry is attracting some of the most recognized billionaires in money management.

Stanley Druckenmiller’s Duquesne Family Office bought 1.68 million shares in VanEck Vectors Oil Services ETF in the second quarter, the third-biggest addition to its portfolio in the period, a regulatory filing showed Tuesday. It also added the Energy Select Sector SPDR Fund. George Soros’s hedge fund bought energy stocks including Chevron.

The global energy industry is extending a recovery from the worst crude crash in a generation, with benchmark U.S. oil prices touching a more-than three-year high in July. The revival kicked off in the shale fields of North America last year and is now spreading outside the U.S. and Canada. Schlumberger, the world’s biggest oilfield services provider, said last month it expects business to be so brisk that it will sell out the services and equipment it supplies internationally by the end of the year.

“Global oil markets have tightened and oil prices will remain elevated in our view for the next few years," James West, an analyst at Evercore ISI, said earlier this month in a note to investors. “The international inflection point is underway and we believe it has been stronger than anticipated."

Marathon, Devon

Duquesne also added shares in companies including Marathon Petroleum and Devon Energy last quarter.

The stake in the VanEck exchange-traded fund was valued at $44.1 million, while the Marathon Petroleum shares, its fourth-largest addition, were worth $34.8 million, according to the filing. The biggest acquisition last quarter for the family office was Facebook and Gilead Sciences.

Soros Fund Management’s biggest addition in the energy sector is Devon Energy, valued at $30.8 million. The hedge fund also bought stakes in Andeavor, RSP Permian Inc. and Kinder Morgan.

Filings released this month don’t include hedge funds’ current position, which may have changed since the end of the quarter. Money managers who oversee more than $100 million in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.