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George Soros Sells Oil Producers, Buys Oil Distributors

Billionaire investor George Soros has sold most of his holdings of oil producers during the last quarter, instead he has bought oil equipment makers, services companies and distributors.

As oil prices hit multiyear highs during the last quarters, Soros dramatically reduced his holdings in oil producers. The number of oil producers in his holdings was reduced from 17 to 8 during the second quarter, then to only 1 in the third quarter. On Sept. 30, the only oil producer he owns is Pioneer Natural Resources Co. (PXD). The industrial weight of oil producers in his holdings decreased from more than 19% to only 2.8%. Burlington Resources Inc. (BR), Devon Energy Corp (DVN) and ExxonMobil Corp.(XOM) are among the oil producers he has sold during the second quarter. ConocoPhillips (COP), Chevron Corp. (CVX) and 4 other oil producers are among the sold during the third quarter

As he sells oil producers, George Soros buys oil equipment makers, service companies and distributors. The number of companies he owns in this industry has increased from 2 to 6. He bought BJ Services Corp. (BJS), Halliburton Co. (HAL), Schlumberger Ltd. (SLB), Noble Corp. (NE). the weight of this industry in his equity holdings has increased from 0.6% to 3.6% during the third quarter.

As one of the largest hedge fund managers in the world, with approximately $13 billion of assets under management, Soros ranked as the 55th richest man on earth. Known for his excellent investment record and macroscopic insight in economic trends, what prompted Soros's recent oil move? Did he think that oil stocks are due for correction? Did he see something that others have not seen?