One of the biggest news events of the year seems to be the explosion of the oil rig in the Gulf of Mexico. While initially the worry was for the workers on the oil rig, it has now turned to the massive oil spill that is causing havoc in the Gulf of Mexico. How is this affecting the companies who are involved with this oil spill? If this past week is any indication, not well.
On April 20, the Deepwater Horizon oil platform exploded in the Gulf of Mexico after a blowout. Sinking two days later, the explosion killed 11 people and caused 17 injuries. Another consequence of this explosion is the roughly 5,000 barrels of oil leaking out each day from where the platform once stood. While BP, the company involved estimated only 1,000 barrels a day is being released, roughly 10 times that may be coming out on a daily basis. Naturally, this has hurt BPs stock immensely.
Since Thursday, BP (NYSE: BP) has seen its stock price fall by eight percent with more news of the immense damage being caused by the oil slick spreading around the Gulf of Mexico. Currently sitting at $52.15, the stock is expected to go down even more. Another company affected by the oil spill is Halliburton (NYSE: HAL), who are responsible for the cementing process that could have been a factor in the explosion; saw their stock fall by 5.3 percent this week to $31.60. Cameron (NYSE: CAM), who manufacture the blowout equipment that didn’t seem to work in the explosion, had their stock fall by 13 percent to $38.70.
While the companies are accepting responsibility for the oil spill disaster that has not helped their stock in the least. It is expected that all three companies will see their stock continue to fall as the environmental fallout of the explosion continues to worsen.
BP, Cameron and Halliburton are three companies that are going to be taking some very big hits in the coming weeks. As the environmental impact of the oil spill worsens, more and more investors will be getting away from these companies that are seeing their stocks sink like stones. It is not a good time to be investing in any of these three companies; at least until the oil spill fades from the news in the coming weeks.
Which companies will come out strong?
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