Warren Buffett appears to be sniffing for opportunity around oil, as crude prices have started the year on a sour note, logging the third straight monthly loss for January.

According to a regulatory filing on Friday, Buffett’s Berkshire Hathaway Inc. BRK.A, -1.03% bought 2.54 million shares of Phillips 66 PSX, -0.26% shares last week, spending about $198 million. Regulatory filings show Berkshire busied up its January buying shares of one of the world’s biggest independent refiners.

Berkshire announced in August that its ownership of Phillips 66 stock was up to 10%. As noted by ValueWalk, the purchases of the stock in January bring the Berkshire stake up to 13.6% of shares outstanding around $5.8 billion. The total purchase was just over $800 million in the month — $625 million in early January and $200 million late in the month, noted ValueWalk.

Phillips 66 two-year chart

The Berkshire filing came through Friday just hours after Phillips 66 reported a 43% drop in profit and 38% slide in revenue, as weak commodity prices weighed on the company.

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But those earnings weren’t all bad news, according to analyst Justin Jenkins at Raymond James. Adjusted earnings per share of $1.31 came in higher than the $1.25 he and the rest of Wall Street (on average) was expecting, driven by stronger-than-expected refining results. That offset lower-than-expected results in other segments, such as midstream and chemicals, he said.

Refining operating income, coming in at $475 million, topped his estimate of $416 million, though across the company, margins of $9.41/Bbl were below his $9.59/Bbl estimate. And refining operating expenses were under control, said Jenkins, who added that the company repurchased $406 million worth of shares in the quarter, bringing the 2015 total to $1.5 billion.

The fact that Buffett made a move on Phillips 66 in January will no doubt draw more attention to the shares and maybe the sector as a whole, as the investing world seems to hang on his every word when it comes to how to make a buck in this stock market, especially one that has been so hard to read over the past year.

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An initial guess could be that Buffett is making a play on oil, as many watch and wait to see if the bottom will truly come in for crude this year. But writing for Seeking Alpha, Albert Alfonso said that this stock is more of a fit when it comes to the value plays that Buffett likes.Philipps 66 had a price/earnings ratio of 9.3 times as of Friday’s close, compared with a 17 times PE ratio for the S&P 500.

Phillips 66, a downstream oil and gas giant, was created in 2012 when ConocoPhillips COP, +2.87% spun off its chemical and downstream units. The company earns money by refining oil, and selling chemical products made from oil. Alfonso points out that the company makes its money on the big price differentials between various sources of crude oil and demand for gasoline.

Whereas low oil prices are painful for ConocoPhillips, refiners like Phillips 66 are one segment of the oil industry that actually benefits from lower oil prices, because the process of refining oil into gas is made cheaper when crude prices are lower. And strong demand for gasoline doesn’t hurt refiners either.

Discussing his stake on CNBC last September, Buffett had this to say: “We’re not buying it as a refiner and we’re certainly not buying it as an integrated oil company. We’re buying it because we like the company and we like the management very much.”

Chairman and Chief Executive Officer Greg Garland has done a “terrific job” since taking over when the company was spun off, said Buffett.

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He also said that Berkshire was not interested in trying to take over the company outright, noting that Phillips 66 “likes its independence.”