BP rallies on political support

SHARES in BP rebounded from yesterday's 13-year low, as investors welcome support from British politicians for the beleagured oil giant and point to hopes its dividend might be deferred rather than cut.
By The Newsroom
Published 11th Jun 2010, 11:14 BST

"There may be a sort of feeling that yesterday morning was almost capitulation point in terms of the stock and so possibly people have taken heart from the fact that the political rhetoric is not just one side of the Atlantic," said Barclays Capital analyst Lucy Haskins.

British newspapers also rounded on President Barack Obama over his criticism of the company.

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Shares in BP had closed down 6.7 percent on Thursday when they sank to their lowest point since April 1997 as oil leaked into the Gulf of Mexico for the eighth week.

The gain in BP's share price, outperforming the FTSE 100 and the European oil and gas index, comes despite US government scientists doubling their estimate of the amount of oil gushing out of the ruptured well.

Friday's rise does little to mend damage done to BP shares over the last two months - the company is currently worth just over 70bn versus over 120bn when the spill hit in April - but analysts say there are hopes the worst may be over.

"We've seen a bit of bad news on the estimates on the spill is a lot higher than expected but BP seems to be turning the corner and gradually getting more and more of this oil on board which is good news. There's a little less fear and panic out there at the moment," said Panmure Gordon analyst Peter Hitchens.