After three months of incredible tall tales and speculation about insolvency running rampant, it appears that BP (NYSE:BP) (Formerly British Petroleum) is regaining a bit of lost ground as well as squashing a lot of media myths that were thrown out there. Very recently, there have been reports suggesting that while the spill was a terrible accident to be sure….the damage done is much less than was originally speculated and pushed in the mainstream media. Now I am not saying there is not plenty of damage done already, but as I wrote in an earlier piece, where are all the beaches blackened by oil? Where are all the contaminated fish in the gulf? Are they avoiding capture? The testing of fish in the gulf has proven that fishing there is still safe. Areas once off limits are slowly coming back on line for gulf fishermen. I myself wonder why areas were off limits to begin with. Did the fish get notified that there were restricted areas they were not permitted to swim? Silly question I know, but it does make you ponder how this whole situation has been badly managed by the government as well as BP. I lay the blame on both. BP CEO Tony Hayward was not equipped to deal with the media covering this event at all. How he became a CEO is anyone’s guess. It takes a lot more than an education to be CEO material, and high among the qualifications should be crisis management and media sense, both areas in which Mr. Hayward is unfortunately lacking. In fact, those two qualifications or lack thereof are what cost him his job.
Getting back to the heart of the matter; it appears that much of the oil has disappeared before it had a chance to do serious damage to shorelines and more marsh areas. This has been written about lately with even well known scientists saying that natural microbes appear to have done their job and gobbled up considerable amounts of oil. Some oil has evaporated in the summer heat as well. Sure there has been quite a bit of oil covered fowl photographed being washed by volunteers, and it is heartbreaking to see them as helpless victims of the disaster, but where are the massive amounts of dead and dying animals. It was not long ago, that media reporters like Anderson Cooper were sure that there would be thousands of dead animal carcasses washing ashore. Has BP managed to hide them all? Of course not, so where does this lead us.
It has become more than apparent that the Obama administration wanted this catastrophe to be its Alamo for the Green Energy coalition. At the center of the controversy is Congressman Ed Markey who has never missed an opportunity to bash BP and big Oil in general. In fact, he has been doing this since long before this disaster took place, and has just dialed up the rhetoric since it began. Some of his early commentary during this administration is available here: http://www.huffingtonpost.com/rep-ed-markey/the-white-house-the-house_b_143721.html
I would like to see an investigation into his and some other politicians commentary and the timing of it. It seemed awfully calculated at times during this crisis. The constant negativity by the White House and the media is plain proof of the attempt to make the spill the equivalent of the Alamo for the Green Energy coalition. . However, the recent turn of events when BP capped the well successfully and early has created a sudden silence from the administration and the coalition members as they try to figure out how to spin the positive recent physical and scientific news, and continue to attempt to kill gulf oil industry jobs in an already weak economy with their insistence on a deepwater moratorium. It was more than obvious to anyone who listened to the questioning of big oil executives recently, that none of the companies had any real plan of substance to deal with any crisis at all. BP took a ton of heat, and rightly so, but with that heat came lots of manipulative media stories designed to push market sentiment on BP lower than it ever should have been. The rumors of BPs demise have been greatly exaggerated. BP shares have been trending higher and recapturing lost value lately, and that trend should only continue as the company gets ready to kill the well permanently. Thankfully, there has been no oil flowing for two weeks now, so every drop that is skimmed is making a real difference. That can only be a positive development for sure, along with the tactics and knowledge that has been gained from the situation.
Of course there are still lawsuits to defend, and much more cleaning up to do for the company and all the workers helping to make it better. The real tragedy here is that 11 workers may have lost their lives because of incompetent decision making by some executives from BP, Anadarko and Halliburton. For that, no price is too great in compensation. As the investigations continue, there will be much revealed regarding incompetence and hopefully those individuals responsible will be made accountable for it along with their companies. However 11 families will never really feel true joy again, even with the accountability, and that is one price that can never be paid in full.
BP continues trending higher having closed at $38.47 Friday, up from the lows of last month and the below 30 dollar rampage we saw back in June. As an investor, capitalizing on situations like this are rare and must be viewed with caution, but can pay huge gains if you can weed through the nonsense. As always, doing your own research along with reading other peoples research is the best way to go. Anyone else out there had success researching the situation and accumulating or trading BP ? We’d love to hear some feedback.
Disclosure: Currently holding a long position in BP
and not reality. When does it stop? There needs to be an investigation and resulting punishment that is appropriate for the harm being done to multiple economies all in the name of deriving profits off largely overblown risk to current events.
