As BP is my favorite integrated oil company I’ve been following this gulf story closely. It certainly sounds like this mess with the blown well is going to take a long time.. maybe months to fix and you just know it’s going to be a daily story. Of course BP is insured.. and there are other companies involved that are taking a hit but every time the story comes up it’s BP getting trashed. I was already mostly out of the market as of a couple weeks ago.. but I further reduced my position in BP in favor of CVX early this week. If nothing else I think a few months of bad press will cause money to flow out of those involved companies (BP, RIG, APC, HAL) and into competitors. Of course.. that’s not really being fair given how much value those have already lost since the story broke.. but that’s market sentiment for you. As the story evolves it will be interesting to see who else gets dragged through the mud and what affect that has as you get further and further away from those with direct involvement. I expect any such decline will be temporary though… BP has good dividend support and is already looking pretty attractive at these levels. The other companies currently taking a hit aren’t so fortunate though… will they continue to slide downward while BP attracts more buyers for the yield?
Currently Reading: Structures - Why Things Don’t Fall Down