And Warren Buffett had the right nose.

The star investor channeled his money into oil and gas stocks.

At a time when investments in Europe were being steered away from fossil fuels towards renewable energy.

And at a time when few would have expected Russia to invade Ukraine.

Buffett was rewarded.

If you look at the past 52 weeks, ExxonMobil's shares have increased by a whopping 66 percent.

And that doesn't even put the US oil and gas giant above average.

The price of the Texan oil company Marathon Oil has even risen by 135 percent in the past twelve months.

Philip Pickert

Business correspondent based in London.

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Archibald Preuschat

Editor in Business

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Niklas Zaboji

Economic correspondent in Paris

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The sharp rise in oil prices has resulted in disproportionately strong cash flows for oil companies.

This allows you to reduce debt, buy back your own shares and pay high dividends.

– everything investors like.

A year ago, a barrel of the WTI variety mined in the USA cost 70 dollars, it is now 120 dollars – an increase of 70 percent.

And there is no end in sight to the rise now that the effects of the Russian oil embargo are becoming more noticeable and China is gradually easing its corona-related restrictions and with it the demand for oil is picking up again.

In a technical analysis, Bas Heijink from ING even considers an oil price of $150 a barrel to be possible.

A level that Bertrand Hodee, analyst at Kepler Cheuvreux, also believes is not out of the world.

That's why Werner Eisenmann, an analyst at DZ Bank, raised the fair value for ExxonMobil's paper from $95 to $115 (price: $104) and confirmed his buy recommendation.

The analyst particularly likes the integrated approach of the US company.

Exxon Mobile makes money not only from oil but also from gas and benefits from increasing margins at the refineries.

“In our opinion, this is not yet fully reflected in the valuation ratios.

The solid balance sheet, the announced high cost reductions, the restructuring of the business model, the exploration successes in Guyana as well as the good position in LNG and in the Permian Basin form the basis for attractive and sustainably increasing dividends as well as high share buybacks," says a study published this week by the analyst at DZ Bank.

Now, Exxon Mobile's stock, with a price-to-earnings ratio of 9.6 this year, is valued higher than BP, which is expected to have a price-to-earnings ratio of 5.7 this year.

“The US energy sector tends to outperform the European energy sector in times of rising oil prices and the sector index the IXETR (Energy Select Sector Total Return Index) is up 68 percent year-to-date with its European counterpart, the SXEP, falling 29 percent up,” Henry Tarr, an analyst at Berenberg, told the FAZ. This is partly because the US sector is more focused on mining activities, while Europe has more integrated companies and is more focused on the energy transition and renewable energy, which dependence on oil and gas prices will decrease over time.