Is It Time to Buy Oil?

Or is it way too early?

Even Warren Buffett has been bamboozled by oil.

He admitted it in his latest annual report to the shareholders of Berkshire Hathaway (NYSE: BRK-A) — the holding company he runs. In his own words: “I bought a large amount of ConocoPhillips (NYSE: COP) stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year.”

Specifically, he made the bulk of his purchases during the six months ending Sept. 30, 2008 — you know, the same time in which oil prices peaked near $150 a barrel.

The price of oil is now around $50 a barrel, and ConocoPhillips’ stock price has tanked in lockstep with the oil freefall. Buffett clearly bought oil too early. But is it still too early for us to buy up oil stocks now?

… Those bullish on oil point to the inevitability of “peak oil,” arguing that the time will come when we hit the peak of global oil production. From that point on, we’ll be able to pump less and less oil out of the ground. In economic terms, we’ll face decreasing supply.

MSNBC