A day after increasing speculation about the financial impact of the disaster in the Gulf of Mexico sparked heavy selling in the companies involved, investors were buying up shares nearly as rapidly Thursday, lifting BP PLC and the broader sector.
The market’s spotlight was undoubtedly again on BP, which climbed 12 percent to $32.81 in recent action. While it has yet to claw back all of Wednesday’s 16 percent stumble — its worst trading loss in percentage terms since at least 1972 — a gain of more than 12 percent would be BP’s fourth-best percentage trading gain since at least 1984.
Analysts have attributed much of the decline to ever-harsher political rhetoric and urged BP to act quickly to mollify administration of President Barack Obama.
“BP has been late to recognize the critical political sensitivity,” said NCB Stockbrokers analyst Peter Hutton. “They need to act on this quickly in our view, to give the U.S. establishment enough room to claim progress without resorting to emergency legislation.”
The U.K. oil giant said Thursday it saw no reason for such a dramatic drop in shares, arguing it was facing the Gulf of Mexico disaster “as a strong company” and had sufficient cash. Market speculation had kicked into high gear during Wednesday’s fall that BP would face financial difficulty in handling the growing bill.
Rallying along with it were other international oil giants. There were also gains in other oilfield-services companies, particularly those with operations in the Gulf of Mexico. The group has slumped over a moratorium put in place on deepwater drilling in the Gulf, but analysts Thursday tried to distinguish among those companies most at risk and those that are buying opportunities.