Crude's bearish run won't last, Buffett says

New York: Warren Buffett said crude oil will rise far above its current price and that he made a mistake when he purchased ConocoPhillips stock last year for Berkshire Hathaway.

"I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price," Buffett wrote in his annual letter to shareholders.

He also said he made a "major mistake" when he bought a "large amount of ConocoPhillips stock when oil and gas prices were near their peak."

Berkshire Hathaway on Friday posted a fifth-straight profit drop, the longest streak of quarterly declines in at least 17 years, on losses from derivative bets tied to stock markets.

Fourth-quarter net income fell 96 per cent to $117 million, or $76 a share, from $2.95 billion, or $1,904 a share, in the same period a year earlier, the company said in its annual report.

In 2007, Berkshire reported record earnings as Buffett booked a $3.5 billion profit cashing out of a $500 million investment in oil producer PetroChina Co.

Buffett wrote on Friday that "the terrible timing" of his ConocoPhillips purchase cost Berkshire "several billion dollars".

According to figures given in the letter, Berkshire Hathaway purchased the ConocoPhillips stock for $7.01 billion. As of December 31, the stake was valued at $4.4 billion.

Crude prices are up 7.4 per cent this month and 0.4 per cent so far this year. Futures have dropped 70 per cent from the record $147.27 a barrel reached on July 11.