BP shares lag post oil spill deal

Published:  7 Mar at 6 PM

As reported by Reuters, market shares in BP increased less than many analysts had expected after the oil giant finalised a settlement worth around $7.8 billion with firms and individuals hit by the oil spill on the Gulf of Mexico.

Investors said the legal settlement was generally lived up to expectations, but the reduced legal uncertainties and the outstanding legal risks were still holding back stock prices.

It is rather the end of the start of the legal battle, said Will Riley (fund manager with Guinness Asset Management). Instead of getting too optimistic about the situation, people should see it as a step in a better direction, he said.

The rise in share prices, however small, also mirrored the fact that BP's stakes had already risen on the anticipation of a settlement, explained Paul Mumford, who is a fund manager with Cavendish Asset Management.

BP shares finished up by 1.6% at 504.6 pence, performing better than the 0.3% fall in the STOXX Europe 600 gas and oil index.

In a series of optimistic research notes, analysts have predicted BP's stakes could soar over 5% with the news of the settlement deal. However, none of the notes witnessed by Reuters actually showed upgrades in the BP ratings.