Unless you've been hiding in a cave somewhere, you know about the largest oil spill in U.S. history which was triggered when the Deepwater Horizon drilling rig suffered massive failure and subsequently sank, causing oil to begin gushing into the Gulf of Mexico.
Many of us also remember the Exxon-Valdez spill of 1989 which, until recently, was considered the worst in U.S. controlled waters and an environmental disaster. In the years since this tragedy in the remote waters off the Alaskan coast, Exxon has made a full recovery, including a 1999 merger with Mobil which made ExxonMobil one of the largest publicly traded companies in the last few years.
There are many differences between the Exxon spill and the recent BP spill, namely the proximity to the continental United States and its thriving coast along the Gulf of Mexico, so the question we pose to our Trader's Blog readers is, is it a great time to invest in BP stock and hold out for its recovery, or is a short position the only one to consider when talking about this market?
After you vote, be sure to tell us what you think in our comments section below.
BP p.l.c. Common Stock (ticker symbol BP) has sucessfully climbed up the proverbial "Wall Of Worry" and WOW! it now sits at $47.93 still comfortably riding along on top of its 50 Day Moving Average. (I suppose I should have traded shares of BPT for shares of BP back in July but hindsight is often 20-20).
BP briefly slouched below the 50DMA line on two occasions after its bounce up from $26.75. That's nearly a double. Put this in your lexicon of investing quotes if you'd like: "A dead cat bounce is only proof of the cat being dead after the cat has lost all nine lives." And BP still has 8 lives to go and deep pockets with plenty of oil reserves.
And all the worry previously being spread around the internet and other news media about the BP oil spill being a disaster of epic proportions seems to have receded so far, becoming a dim memory, only to be replaced by the hot button topics that the media circus loves to dish out every day (like stories about our dysfunctional governments, killer diet soda and the latest gossip about movie star scandals).
I suspect that the Chinese would love to be able to take over BP at even twice the current price because of their insatiable appetite and need for oil. Any comments on the recent prediction that oil will reach $300 a barrel by 2020? It seems that investing in high quality oil producing company stocks is almost like a guarantee of a 200% return in 9 years. Or am I missing something like a new miracle energy source? Maybe somebody can harness all of that hot air generated in Washington D.C.?
Great article and right to the point. I don't know if this is really the best place to ask but do you folks have any thoughts on where to get some professional writers? Thanks again 🙂
JOHN D. LOPEZ JR.
WELL NOW; WE SEE THE PROGRESS IS IN A POSITIVE DIRECTION WITH THE (LEAK)OR OIL SPILL,WOULD IT BE WISE TO INVEST IN BP STOCKS. YES IT WOULD IT IS A VERY SOUND
CORPORATION WELL PLANTED. THE ONLY DIFFERENCE BETWEEN THEIR MISTAKES AND MINE
EVERYBODY HELPS THEIRS STAND OUT, AND NOT MINE!!OFFSHORE DRILLING MUST GO ON AND
BP WILL BE A LEADER IN DEEP WATER DRILLING.AMERICANS WILL USE THE OIL PRODUCTION
FROM IT AND NEVER LOOK BACK. BUY SOME BP STOCK. THE MARKET WILL SOON FALL BACK
BUT STOCKS LIKE BP AND UNG ARE SOUND AND WON'T NEED A MASSIVE RECOVERY
It looks like BP did a "Falling Knife Bounce" from $26.75 to $36.18. And the SAR indicator turned green at about $30 and is still green. Could it just be a "Dead Cat Bounce"?
I agree. Don't even try to catch knives (unless perhaps you're profession is knife catching). And maybe there is "death by a thousand cuts" awaiting us from the thousands of capped oil wells that may eventually leak in the Gulf of Mexico. But your response also makes me wonder what the purpose of the question was in the first place ("Can BP pull an Exxon?").
Was the question directed to understanding the chances of BP's survival or whether or not to buy BP stock? If it only concerns BP's survival, then the question doesn't seem particularly relevant to what Market Club does, which is providing services that give buy and sell signals and guidance on the stock market. And since the implication is that BP stock is falling like a knife, then one look at the chart ought to be enough to conclude that it is not yet time to be buying. Perhaps you'll share your technical thoughts about BP on the white board sometime and some words about contrarian investors.
I thank you for your fine white board presentations. They are clear and to the point.
In any event BP seems like the hot potato stock of the day. And stocks of companies that stir up too many emotions may be dangerous to trade because emotions can often get in the way of rational decision making.
Jerr,
Thanks for your followup.
All the best,
Adam
THE GENERAL CONCENSUS IS AS I SAID BEFORE"LETS HELP OUT BP! THIS SPILL IS NOT
A JUSTIFICATION TO START ANOTHER WAR OVER. AND TO THOSE WHO MEASURE ONLY THE
ENVIORNMENTAL IMPACT--THEN LETS GO BACK AND MEASURE THE IMPACT OF TWO OTHER
INCIDENTS--HIROSHIMA AND NAGASAKI JAPAN!!!THE DAMAGE FROM THESE TWO ATOMIC
BOMBS STILL LIVES IN JAPAN---MASSIVE DESTRUCTION--AND RADIATION DAMAGE BY THE
ONLY COUNTRY EVER TO USE ATOMIC WEAPONS!!OH YES I'M AN HONORABLY SERVED AMERICAN SERVICE VETERAN.LETS END OPRESSION AND TALK ABOUT HOW WE CAN HELP.
JOHN D. LOPEZ JR.
If Obama pushes the first domino over(BP ) then watch it fall ,insurance funds in America, banks , mutal funds , maybe even a government or two around the world as these companies are cash cows for governments,as demonstrated by the British Prime minister having seen Obama on this issue.
Great time to invest in fishing shares as they will be a net importer of seafood for some years , Do they eat whale meat ?? Hmm.
Cheers Don
Most of the responses to your question are not surprising given the anger, fear, worry and uncertainty about the consequences of the oil spill in the Gulf of Mexico. There are plenty of reasons to conclude that the whole planet is now at or approaching "Peak Everything." The easy pickings are gone. It has been something like over 60 years since the USA was a significant net exporter of oil. Easy to get US land based oil is all gone. Peak everything includes the disappearing mineral wealth, arable land, potable water sources and the animal and plant life that both sustains the human species and makes life enriching, rewarding and interesting. Perhaps human ingenuity will save the day. Along the way I expect massive human suffering and the
extinction of many animal and plant species. Unfortunately the human race needs to overcome its worst enemy: itself. If the world's human population continues to grow at what at first sounds like a modest growth rate currently at 1.1% per year, then there will be twice as many people needing food, water, shelter, health care and other needs in just 60 years. Many of these needs are barely or not being met for billions of people today. It will likely get tougher in the future.
But all of these concerns ignores the question posed to us by Susan, "is it a great time to invest in BP stock and hold out for its recovery, or is a short position the only one to consider when talking about this market?"
Everyone is probably aware of the fundamental problems facing BP. And there are differing opinions about the scope of the problems: the cost in time, money and lives to solve the problems or if they are even solvable. On that basis alone many investors would prefer avoiding BP stock. After all, there are thousands of stocks to pick from and many of them have better fundamental and technical qualities than BP. And the trouble with some of these fundamental issues to my way of thinking is how can anybody accurately determine a semblance of a risk-reward ratio.
So that brings us to the technical picture. Adam and his service can tell you where BP's stock chart looks by his Trade Triangles and composite scores. But there are also other tech indicators we can look at. BP closed at $29.35 a share. The price chart is in a classic 45 degree angle of collapse. Parabolic SAR just turned GREEN from RED. But warning: the previous time it turned GREEN for three days then a RED collapse followed. MACD recently turned up from an extreme reading below -4. RSI is divergent from the price trend, rising from below 10 to above 20 but currently wiggling down again. Larry William's percent of range recently crossed up from 100% to above 80%. But the previous time it got turned around at 50%. I won't even mention other indicators. So is it safe to buy BP now? I don't think so. If anybody does buy it now they better protect with a small stop below the purchase price. And they shouldn't be surprised if it turns into a loss.
Jerr,
You don't catch falling knives.
Adam
BP employs 29,000 Americans, and a lot more worldwide. It would be the wrong response to crush this company and all the innocent employees over this event. Not in current conditions. BP will pay dearly but not to the point some would consider justified -This is likely the political reality. BP will survive.
They are culpable though, having enforced their decisions over contractor objections, and I am betting the contractors will be exonerated due to this.
BP just ordered 32 of Kevin Cosner's machines which I hope will be effective at cleaning up the surface oil, though this spill would seem to require thousands of them at this point.
Having Worked in the oilfield in Texas in the past, I see this, not as a disaster but as another frontier to overcome.In the past we had Mr.
Red Adair--Boots & Coots to professionaly solve new problems of the oil
-field. God knows we Americans are dependent on OIL for survival, so lets buck up wear a smile and help BP solve this problem before we try
to go to the moon again.Some Americans better get their BRAINS out of
the fast lane. The British people are our ALLIES--not ENEMYS.Solving
this problem will open a whole new field in offshore drilling,and this
problem will be solved.
Rainey, I think it is entirely appropriate for "this President" to point fingers and lay blame for this manmade problem, and to lay the blame squarely on the principal corporations, and on the lack of regulation by the previous administration. Obama could not have called up the Natl Guard on a moment's notice, and plans first had to be made but only after accurate information was gathered. Notice that NONE of the other expert companies rushed in with a solution either.
I still like the idea of 20 billion this month and 20 billion next month, etc., until all the bills get paid.
But this will be my last post on BP (I hope). Getting too political, including myself.
I made some great money shorting BP only a week or so after the news came out... now I'm out... who knows what tomorrow will bring.
Wait for the stock to drop further. BP should move up wants the mess is cleared. Mostly like their 2009 profit would be wiped out but i believe there have very strong cash flow.
Why BP can't go bust.
1.My basic understanding people in general still need jobs. The world economy is still uncertain especially with EU Zone Markets uncertain.
2.Mostly likely i would not be suprise if USA could get BP into clean engery investment it could be another form of job creation.
Wow! Another free market generated opportunity, will the benefits never end?
BP will be an interesting chart to watch. When and if BP solves this current mechanical crisis on it's own and a restoration of the Gulf coast is under way, the fun and games of BP's liability will commence in earnest. That will be the time in my view to watch market action on the stock. Personally I'd like to see the stock fall below $20 or more and then look for consolodation. Could be a fast move up from there.
I consider this a recession for BP. They to will recover
Whats the difference the common man is going to pay anyway
The company should be taken over and all assets be taken for damages.
And all the ignorant RATS responsible put in jail for a very long time,
but that will not happen.
Their asses will be kissed and they will be sent on their way to
continue,MEDIA will let it die so that investing in these creeps can
continue.
The rulers of the world will continue, while Mother earth dies along
with us.
If Obama squeezes the life out of BP, the US taxpayers will inherit the remaining long term cost of the spill. Who else will pay if there is no BP?
After reading about how BP disregarded the advice of subcontractors prior to this disaster, and coming across some enlighting blogs on
BP's history, particularly in Alaska:
http://www.gregpalast.com/smart-pig-bps-other-spill-this-week/
I suspect they can't buy their way out of this one. Verdict DOWN.
Big Big Trouble for mankind on two fronts 1. The oil spill is about to pollute one of the great oceans of the world . 2. A volcano has been depositing a cloud of ash on an ice cap just a little thermal blanket to help it melt quicker I think it called the north pole . So who would you ask for the truth a politician / scientist, me I would ask a fish in the Gulf of Mexico , reply by the fish " If you plan on having a holiday in Florida this summer don't bring sunscreen it's been added to the water". Oh ! Ya , and when do you want that first hurricane before or after the leak has been plugged.??
Cheers
Larry, the fish are not exactly resting. They are dying. Try the mussels in January.
Hey, all I can do from here is pay whatever gas costs, be as thrifty as reasonably possible with energy, and do what I can for my family with my meager investing. Any investments I might make in BP, RIG, or XOM are not green, just a roll of my dice. I'm not prepared to "boycott" anybody, that's about as effective as signing an internet petition.
I have worked in and around this subsea drilling and its related equipment and proceedures since 1974. This is safer than most other forms of energy extraction/production. This is a big high cost/risk operation. When you "win," as this well was obviously a big winner, you can really win big. In this case there are obviously millions of bbls of oil unleashed on the surface for salvaging. With the price of oil near $75 / BBL don't think for one minute that people are not out there scavaging! They are, and the lure of all that money from the "free" oil will get it cleaned up. Scavaging oil definitely pays better than fishing. Besides, when have the Fishermen allowed their fishing beds sbatical rest? The fish need the break while the Fishermen get rich salvaging the oil. Free markets work. What say you?
the people screaming for blood and reparations from 1. BP and 2. the oil industry haven't looked at where this is all headed. Obama is playing this to the hilt to jack up a sagging approval rating. Congress wants a diversion from the Health Care battle. But the realities are ignored. Force the penalties on BP being contemplated
)"....20 billion for June, 20 billion for July.....") and BP simply pulls the plug, declares bankruptcy and walks. No more rescue efforts or dmages payments. The stringent regulations being demanded.....small companies won't be able to finance operations in the Gulf or near the US anywhere, leaving the field to the big companies who caused this mess. The hasty ill thought out moratorium by Obama promises a default on the state and municipal bonds of every Gulf state and municipality followed by a collapse of the Muni market itself.
the only workable solution is to create a task force of major oil industry companies to attack the elements of the disaster they each are most capable of handling. blame and changed regulations are for after the disaster is contained. the concentration on blame, penalties and hate at this point will guarantee that this disaster takes on an uncontrolable life of its own.
I totally agree..fix this first..stop the blame and fix the problem.
Contend with all else later!!
For the past decade or so, I have watched as engineers have been ignored by management/executives, and marketers followed. In all cases this has 'cost' the companies. I have persoanl knowledge of an expampkle in a telecommunciatiopns company, but in this case it only cost the company a poorer quality network at far greater expense not in lives and environmental destruction. Until it is made law that managment are held responisble at least criminally for ignoring engineering advise, then they are just not going to follow it- no matyter wahte the cost. Persoanlly I think they should be held fincially and criminally accountable where they have deliberately not followed engineering adivse and be made to state why they chose not to follow it to the board of directors. Engibneers in the few times there are concerned should be able to approach the board of directors with powers to call emergency meetings. In any caswe until the managament and exzecutives are held persoanlly criminally responisble, and perhaps also fincially there is not going to be any change.
For BP this spill is a back-breaker! There is no technology for repairing this type of accident in 5000 feet of water. And our present administration is worried about taking BP to court to recover damages that will be existent long after BP goes bankrupt! They should be using resources that are available to come up with the technology to cap the wellhead and use the offered resources from around the world to at least capture some of the oil from the spill before they come ashore!
The dithering Obama administration, headed by a community organizer as opposed to a true executive, is going to capitalize on this tragedy for his political agenda: energy prices that will "necesarily skyrocket" (his words) as a result of "his plan for cap and trade". The administration will lie about this at every turn to villify BP and attempt to make themselves look like protectors of the environment, and to pass some form of Cap and Trade. (This incompetant president's actions will no doubt cause further harm, as they did recently in the interior department's report that lied and claimed leading engineers recommended a moratorium on deep water drilling; those engineers actually recommended just the opporsite and said stopping drilling could cause another blow out as an earlier post described above.) As the super rigs sail off to other shores and oil becomes even more in the hands of our enemies, I believe probabilities favor going LONG OIL now.
ONE THING IS FOR CERTAIN, HUMAN TECHNOLOGY IS NOT AS ADVANCE AS WE ALL THOUGHT THERE WAS, I BELIEVE THAT THE MOST IMPORTANT THING TO GET OUT OF THIS MESS IS WHAT PRESIDENT OBAMA IS THINKING DEEP INSIDE, WE NEED TO STOP DEEP WATER DRILLING AND STAR LOOKING FOR NEW WAYS TO CREATE ENERGY, WIL STILL NEED OIL, AND WE KNOW HOW TO GET IT IN LAND, AND THAT IS WHAT WE NEED TO REACH FOR, ENVIROMENTAL SAVE EXTRACTION OF OIL
I wouldn't buy until it reacts to whatever the President says today, and we see if it cuts the dividend. But soon it sounds a lot like General Public Utilities (three mile island) did years ago.
Stanislaus
I have found that the credit market (bonds) normally gets the direction right before the equities market does. BP bonds were downgraded today and are taking a real beating. That and the headline risks created by all the congressional hearings and ongoing issues on the Gulf say things will get worse before they get better. Enough said.
If us can help it BP will not survive. Exxon did but then it is US company.
BP is now a takeover target, which will politely be called a 'merger' with one of those suitors working furiously in the wings, whose accountants & company secretaries haven't slept for the past few days... Could be interesting.
I am told BP is not a British company. Its headquarters are in Geneva, Switzerland and the shareholders are mainly US and UK pension funds in equal measure.
While I understand the question of whether to buy BP shares or not, I would rather like to know what the prospects would be of buying oil instead.
They'll ride it out I bet, but I won't buy it until the Trade Triangles prove it to me, and then only a little at a time. There are better investments, many of them.
I like the escrow account to be $20 billion for May, 20 billion for June, again in July, etc.
And STILL, even if they paid that, the company is SO huge.
I know this is business and investing forum. But I am truly less interested in the companies, and the drilling, and the tourism, the politics and the fishing industry, than I am in the ecology and the food chain.
The general public is required to buy insuance for many things.WHY NOT REQUIRE COMPANIES THAT DO THINGS IN NEW ENVIRONMENTS DO THE SAME?We will all suffer in one way or another for many years to come.Some will be hurt more than others but most will not get compensated.How many days to fix a leak?How many years to clean it up?How much do we not know now that will haunt us in years to come?How much compensation is enough compensation?It appears they do not want to stop the leak.They want to capture as much oil as they can.THEY ONLY THINK ABOUT THEIR BOTTOM LINE!!!!WHAT ABOUT OUR BOTTOM LINE?
BP will become the British "AIG"...to big to fail.
The US will enact very strict laws and then appoint people who have been castrated to enforce them.
The corruption will continue...Big Business is more important than Ecology.
Nero is dusting off his fiddle and will be playing on American soil soon.
even a month before oil spill it was clearly seen on chart that it will be huge sell. As we had head and 2 sholders. Simillar situatation was with 9/11 gbp/usd. Chart clearly showed huge decline! The question is it history repet its self or coinsedence, I would not say so.
It is a "don't own any" position. Govt's are finally cutting expenses back globally. So are states, cities and finally the consumer. Consumption is in the drop zone everywhere. Oil storage and storage facilities are reasonably flush. Economic stimuli to date is unsuccesful. See job reports. Dollar weakness now considered a God Send. If inflation does kick in consider oil, or any other commodity. It is not the right time now. What you do today is watch the purchasing power of your dollar like a hawk.
It isn't over. Sounds like it will be another 2 months before relief wells are able to stem the flow. So the clean-up and economic impact will persist. Although a massive leak, the amount of oil is minor when compared to the amount of water in the Gulf. There will be lingering pollution evidence but, eventually it will return to the normal state. Actually, a hurricane or two, after the leak is stopped, would help the area recover.
The lengthy period to stop the flow and clean-up will sap BP for years to come. Any recovery won't be soon. The stock will be depressed and lingering, delayed legal actions will keep it that way. The legal sharks have not begun to circle BP but they will. The PR disaster with marketing impact will drag on BP in the US. A sell-off of parts and/or take-over of assets seem likely.
Gee, all this BP hatred that is off topic to the question posed (whether justified or not). People, this is a trading board, not a political one.
I had found a really cool website, The Oil Drum, which is a forum on which for real drilling engineers discuss things like that. Based on my own engineering experience, and what I saw there, I went very short BP over the memorial day weekend and caught a 14% profit. It was just obvious that the "top kill" wasn't going to work and was in fact making things worse by eroding the leak holes. Going short earlier and holding longer would of course have been a better number result -- but I'll take 14% over a weekend anytime as a sure thing, and not have to worry if this bounce means I have to cover...
My house and lab are powered by solar panels, made by BP as it turns out. They shut their factory about a month before the leak due to it not being profitable, but they made the very best panels there were (which might be why they didn't make so much money at it)...Drilling has risks -- and the market spoke that it wanted oil much more than PV solar power. Anyone ever think they might have some shred of culpability for this by keeping demand for oil so high? I'm more mad about them closing that factory than this, personally.
REMEMBER:
The main reason oil is being drilled at this depth is because of government environ-Mental restrictions preventing the rigs from setting up directional drilling from nearer, shallower, safer locations.
We are much better able to deal with any conditions in shallow depth areas where divers, or even manned subs, and standard equipment are capable of handling the pressures involved.
The very physics of releasing hydrocarbons and their behavior from that depth is new, almost unknown territory.
Give BP access to the tiny ANWAR site in Alaska, and they wouldn't have even bothered with this dangerous deep-gulf drilling.
Yes, BP is responsible for whatever 'they' did, regardless...it's just that they are simply as unequipped to deal with stopping the tunnel-into-the-deep as anyone else. It's never happened before. It couldn't be predicted accurately.
The response at the surface, however, was predictable.
Lots of foreign ships offered to contain and booms to outfit on Navy and Coastguard ships and deploy every dredger available to create temporary berms to protect shores....ALL PREVENTED BY OBAMA's ADMINISTRATION
At least, until the quite-real crisis reached the point they feel the political climate is ripe for more political takeover. They will do everything imaginable and otherwise to rape, pillage, and burn BP.
(just don't burn-off or berm-block the oil itself, that would require a presidential waiver of EPA regs...better to disperse it to the beach and weep on TV about the birds that could have been saved from ever seeing the oil.)
Good post!
We are where the environmental radicals have pushed us; now, they want to blame the oil companies for what they, themselves, manipulated.
Comment by joe c.
Accidents happen.What shocks and dismays me is that no oil company has a proven quick fix (In days not months).Living in Florida, we are already seeing a drop off in tourism and our beaches haven't yet been fouled! If the economies of the gulf states go down because of this,Bp going bankrupt will only be a small story in comparison.
Obama won't survive this debacle unless the government takes every cent it can out of BP. Who will win will be determined by the next dividend payment, IF there is one.
Wait for final dividend determination; after sell-off, time to buy will be established on positive candlestick formation on daily charts (higher high/low)
I think BP is going to go down (just as its rusted oil rig!) for the simple reason that whatever excuses they can find will fall short of the massive catastrophe they have created which affects millions of people and the environment in the sea & coastal regions and beyond...
There is a lesson to be learned for all of us humans, that is never to play the apprentice sorcerer with Mother Nature. And BP is paying the price dearly and will pay for years to come. Period.
I suspect the better strategy is to seee another card. It is not essential to buy at the absolute bottom. It is more important to avoid as much risk as is practical. This will go on for years. Lots of time to buy.Arch
BP's stock value may continue to decrease. It will take some time for a recovery, provided there is one.
On the other hand, we are starting the summer oil season. It's possible their stock value could rally a bit but I wouldn't count on it.
BP's stock still has room to fall. Provide BP stablizes and gets their act together, I'll consider trade strategies when their stock is selling for $10.00 a share.
BP will go bankrupt
I have a question.
With this well and the several that have been brought in by Lucoil in Russia...the theory of Peak Oil and Oil as a fossil fuel is about to be thrown on the scrap heap of disproven theories.
ABIOTIC OIL...The earth is continuously producing oil.
What will this do to the oil and energy markets..????
Easter Island!
The world is so addicted to oil that we drill in more and more risky places so why are we suprised when there are more disasters? Just get used to it because it will not be the last. If we want to do something we should use less oil, drive a smaller car travel less etc. Maybe then by the time we drill at 3 mile depth we will have the technology to cope.
Would this have happened if everyone had bought a Honda Civic instead of their SUV?
As to the shareprice I recon it will be an ABC down move then a recovery. I will play the B wave and then the recovery. Exxon's only dropped 10% when the valdez went down but then again Polar Bears have crappy lawyers.
I totally agree with David...People are complaining so much because it happened in our backyard. If it had happened somewhere else it wouldn't be on the news at all. I am not trying to say that its not a disaster. It is indeed the worst disaster of our times but lets face it. BP or any oil company don't drill oil for their shareholders but to meet the demand. US has 300 million population (6.7 billion world population) and burns 21 million barrels/day (I can't find the % of world's oil though) which is significant portion of world's oil. US consumers enjoy the cheapest oil as compared to other developed countries and so everyone is spoiled. People drive SUVs to go to their work and that also alone. No administration has the courage to enforce the public transport. if Congress had any guts then they should enforce people to drive only few days sorting them by license plate numbers. SUVs shouldn't be allowed on workdays unless it has occupancy more than 3-4 people.
If consumers are not willing to do anything then they should stop complaining. This time it has happened to BP, next time will be another company. Even if you don't drill oil from deep-water, when you transport oil from tankers through sea they run into accident and account for significant portion of the oil spill and human loss.
So lets face it.
No matter what the final act brings the gulf and BP, there is a second disaster. Contrary to what the empaneled experts recommended, the administration in DC chose to shut the gulf to drilling (in depwater portions) for 6 months. The loss of income to Louisiana has been stated as about $330 million per month.
The big drilling rigs charge $500 thousand to one million per day for their services. At the end of the 6 months (even if not extended) those drill rigs will be offshore western Africa, Brazil, the north sea, and perhaps in the Orient--maybe offshore China. It may take a decade to get gulf production back. That's about 1/3 of US production--oil we need to sustain our present way of life. So unless we all start riding bicycles that means more imports.
And, shutting down a well or a partially drilled well is much more dangerous that completing one. The present blowout happened when the well was temporarily shut in to allow production operations with a different rig. The dispute on the rig before the disaster between BP and Transocean leads one to believe BP wanted to cut some corner for speed rather than safety.
When Ixtoc blew in '79 the Mexican government took the position they had sovereign immunity and did not pay for much of anything. The present administration is looking for "whose ass to kick". After returning a bust of Winston Churchill as practically his first official act, can we count on the President to favor a British company. Those in England (and elsewhere) hve reason to fear a bankruptcy. Maybe much later bargain hunters or merger fans could work up some enthusiasm.
According to Lindsay Williams author of "The Energy non-Crisis", he has sources within the oil industry who told him that the pressure coming out of the well is over 27,000 PSI and there is basically no known equipment that is able to stop the leak due to the extreme pressure. I think he said that they drilled so deep that they hit the mantle so the earth is heating the oil and increasing the pressure beyond anything that has ever been seen before. Appearently there are cracks in the sea bed and oil is leaking from other locations also. This has potential to be catastrophic. Even if they stop the flow they will still be drowning in lawsuits and liabilities for years to come.
After reading my post...perhaps I was too kind.
This 'event' will in all likelihood, bring about changes that will stagger the imagination. I am talking about a situation that has the potential to be an "Extinction Level Event" !!!
Please note the use of the word 'potential'.
The plain fact is that this event has no precedent what-so-ever.
The size, scale and factors involved are beyond comprehension let alone experience. And if only by the scale of the efforts to suppress the real facts can one discern just how big this is.
If the facts were to be known..panic would ensue. Just one example: If the reports of the levels of 'benzene and hydrogen sulfide gases' are correct (3-4,000 PPB), in Florida and elsewhere...then literally 10's of millions of people are at serious risk now.! Not tomorrow..NOW !!
If you have friends or family in the Gulf area...get them out now.
And you ask will BP survive..?? It won't matter
You need to take a deep breath. There have been two spills worse than this. In fact, a third one in waters controlled by the former Soviet Union, was closed by a small nuclear device. Of course, it's far more exhilirating, to some personality types, to be the agent of fear, than to actually know something about what you're bloviating about.
At this rate, Lies and deceptions, we will be lucky to make it to 2012...
BP might make a comeback, but it will go down significantly more, and the start it's recovery. So the short term choice is shorting the stock. No senes in buying, losing, and then recovering.
BP will not survive this catastrophe....News of the extent of this so-called spill has been suppressed with lies and deception.
That is why Obama is making a speech tonite. Reports of a flow rate of over one million gallons per/day, well head pressures of 50-70 thousand PSI, (as opposed to 1,500 for normal operations) levels of toxic gases such as benzene and hydrogen sulfide many thousands above 'safe' levels.
And these reports are just the beginning of what may be the single biggest event to affect the planet in centuries,,,a planet changer.
Most people so far cannot even grasp the extent of this event. How much food and water comes from our oceans. This oil will not be contained to the waters of the gulf. Look at a chart of ocean currents. And the Gov. of Fla. is worried about tarballs on the beach! Get Real!!
I live in Mn and watch every summer as huge amounts of moisture(water, rain)leave the gulf and move north, dropping life giving rain to unbelievable amounts of food crops(corn,soybeans,wheat,etc.) which in turn are fed to humans,beef,pork,chickens,turkey,etc. At this point I have a real hard time believing that at least some of the toxins in the gulf are not coming along for the ride. Also, I`ve heard that this is supposed to be one of the heavy hurricane years. The amount of water that comes inland riding a big hurricane is truly amazing.
Our Fearless Leader has had his chance to `be executive` and just `get it done`. As usual, he has been weighed and measured and found lacking. When bp is swept aside like a speck of dust by the size and scope of this event, I think people will be amazed that they could have been so trivial as to even think about share price.
May you all be safe.........
I certainly hope all the voters who wanted change are happy now!
This man is still so busy pointing fingers, when he needed to act immediately to find out what could be done as soon as this explosion occurred. The President of the United States is supposed to act like a president..not a person who seeks to blame and accuse like he is still campaigning. Call in the Reserves, get people to go and help the first minute the incident was known. This politically correct, I don't want to interfere, I thought they knew what they were doing, etc. etc. is all a cop-out for the lack of action to prevent this disaster from becoming such a horrific event. I fear that it will harm the relationship we have had with Britain for so long. With all our modern technology, I truly cannot accept that there is no quick fix to stop this leak. Between BP and our USA there has to be some invention to remedy the situation.
In my lifetime I have seen alot of situations resolved because people cared and were involved, and did not get offended by offers of help. Manual help, not handouts..
I pray to God that there is someone intelligent enough to respond and stop this leak soon.
Andy. 'their stinking, rotten negligent rig'.
I think you mean Transocean, not BP.
There are three companies intimately involved here. That is probably the root underlying cause.
Its like running a comet destruction mission run by three companies.......... for when the unexpected happens the inter-company contract neither covers all eventualities or can be consulted fast enough anyway!!!
This would have been stopped but for a gross failure of supervision which should have been intimate at that stage ( like a pilot on a ship in a tricky port). This is particularly true since the Gulf has seem a larger blow -out disaster near Mexico, so this was not really a black swan event.
If you watch a 60 Minutes story on this a few weeks back, an eyewitness on the rig talks about their being an argument just before the accident between the Transocean manager and a BP manager, with the BP guy overruling his counterpart. The reason? Because the BP guy wanted to do something that would speed things up for them, whereas the Transocean guy wanted a safer option. When this was raised in the 60 Minutes piece to a university guy who's been asked by the government to investigate what wrong, he confirms that this was probably a fateful decision by BP. It might have been a Transocean rig, but BP was the customer and exerting undue and unsafe pressure on them.
Then all three collaborators should face the consequences of forced liquidation due to gross crimes against humanity and nature. Especially Haliburton and BP. Perhaps there is some redemption for Transocean, if what jabalong wrote about them is true. Otherwise to hell with them. As Anthony r points out, this disaster has the *potential* to be an Extinction Level Event. In which case we will all follow BP and Haliburton *there*.
calm down.stop being a chicken little.the earth will survive,life will return,time heals all wounds
The question of timing is there, of course. I would not go long now, since bearish pressure on BP will continue for some time, I think up to a year. When the technicals indicate a recovery, I would definitely buy.
This has the potential to be the worst environmental calamity ever. BP has behaved criminally (I believe) lying at every turn, cutting every corner. I hope the company goes belly-up like their stinking, rotten negligent rig.
BP will be able to ride this out. Even if they have to set aside $20 billion they have the size to do it. Deepwater drilling will commence with more stringent safety rules in place, which will help provide new jobs to the oil and gas services sector (maybe the new workers should give BP a portion of their wages to off set those who have lost their jobs and will be paid out by BP?) Massive cost of clean up, monitoring of the Gulf and coastline etc it's like a mini stimulus. I'm not saying for one minute that anybody wanted this to happen but if BP do end up footing the bill for it, it's not the worst thing in the world for the American economy.
If the dividend is witheld the shareprice may suffer in the short term and a hostile takeover would be the the biggest threat to the company, but once the dividend is re-instated just watch quickly people will 'forget' and buy back into a sound investment.
bp has been in the market for so long b4 exxon-BP is a conservative company wt full home govt backinng BP as known by me while growing up--BiggestPunch an advert in the 60s=70s
they will pull biggest puch again keep your hard earned money
I sense an increase in international tensions and a waining of belief in and commitment to the sanctity of global trade and international corporate power. BP is going to be taken down by Obama.
I sense a waning belief in Obama, particularly in light of his "blah-blah" speech last night. Obama is going to be taken down by BP!
Did You Know?
BP engineers alerted federal regulators at the Minerals Management Service that they were having difficulty controlling the Macondo well (Deepwater Horizon) six weeks before the disaster, according to e- mails released by the Energy and Commerce Committee.
“I don’t think this would have happened on Exxon’s watch,” Tom Bower, author of “The Squeeze: Oil, Money and Greed in the 21st Century,” said in a June 11 Bloomberg Television interview. “They’d be much more careful and much more conscious of the need to supervise subcontractors.”
WELL excuse me your sainted Exxon....... and Chevron and ConocoPhillips.
Let’s just take a look at a few of your past misdemeanours, and then we can consider again – if the moratorium on deepwater drilling should be lifted, and place it all firmly back into your nice clean hands!
http://just-me-in-t.blogspot.com/2010/06/fairy-stories-about-oil-companies.html