Oil Spill Hurts Companies: Perfect Short Trade Opportunity – April 2010
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.
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13 July 2010
bp is horrible! we should all not buy their gas!
15 June 2010
the government would push hard to check British petroleum repaid businesses along with individuals for lost income from your oil spill.
07 June 2010
Seeing what this oil is doing to our shores and wildlife is just terrible. The longer this goes on, the less the country will care – just like Katrina. I feel so bad for the people whose entire worlds are turned upside down.
28 May 2010
I’m just sick to my stomach by this disaster. Where can I find an accurate assessment of the true size of the oil spill? The assessments are widely different from different sources. Thanks for your informative post.
27 May 2010
Worst oil spill in US history. Thanks to the wonderful people at BP. Please stop the madness.
12 May 2010
Really can’t realise the damage the oil spill has caused.
08 May 2010
The oil disaster is crazy because the leak is so deep. I hope BP do all against the spread of the oil. The nature will be destroyed for a long time.
08 May 2010
Well future of BP is doomed for the short-term. One really needs to look at it objectively though. I guess further investigation will reveal for sure how much fault BP has in it. But for now their stock is down 25% in past two weeks
05 May 2010
the oil spill in Mexico would surely be one of the greatest environmental disasters for this year.;..
05 May 2010
This is a disaster that will never be forgotten. More interesting fact about this whole thing from an investors point of view is the ability to know that shorting is going to work! Heck ya!