Oakmark Fund cites crude price retreat as ConocoPhillips drags on Q2 returns

Harris Oakmark’s Oakmark Fund reported that ConocoPhillips was the leading detractor from performance during the second quarter of 2026, as the energy giant’s share price declined alongside easing crude oil prices. In its quarterly investor letter, the fund noted that the stock fell as crude retreated from levels previously elevated by disruptions in the Middle East. Despite the share price weakness, the fund maintained that ConocoPhillips’ underlying fundamentals remained in line with expectations and commended the company’s focus on shareholder returns.

The Oakmark Fund, which seeks capital appreciation through a diversified portfolio of large-cap US companies, underperformed the S&P 500 Index in the quarter. The fund returned 2.45 per cent, compared to the index’s 15.20 per cent return. Market leadership remained narrow during the period, driven by investment in enterprises benefiting from artificial intelligence, while the energy and information technology sectors acted as drags on performance. Conversely, industrials and financials contributed positively to the fund’s results.

ConocoPhillips, a US-based producer of crude oil, bitumen, natural gas, and liquefied natural gas, closed at $112.85 per share on July 13, 2026. The stock had gained 21.93 per cent over the preceding 52 weeks and posted a one-month return of 1.36 per cent as of mid-July, with a market capitalisation of $137.48 billion. The fund highlighted the company’s geographically diverse and inventory-deep energy portfolio as a source of long-term growth potential.

Interest in ConocoPhillips from hedge funds increased during the first quarter of 2026, with 74 hedge fund portfolios holding the stock at the end of the period, up from 65 in the previous quarter. This followed a broader rally in US exploration and production firms earlier in the year, which was driven by rising oil prices linked to geopolitical tensions in the Middle East. Companies such as Antero Resources also saw share price movements during this period.

While the Oakmark Fund praised ConocoPhillips’ management and fundamentals, it acknowledged the challenging macro environment for energy stocks. The fund’s underperformance relative to the broader market underscored the impact of sector-specific headwinds, even as other areas of the portfolio provided support. The fund’s commentary reflected a measured view of the energy sector, balancing near-term price volatility against the company’s operational stability and capital return policies.