-- Posted Wednesday, 2 June 2010 | Digg This Article | | Source: GoldSeek.com
Rick’s Picks Wednesday, June 2, 2010 “Phenomenally accurate forecasts” British Petroleum’s shares have shed 40 percent of their value in the last six weeks, falling from $61 to a low yesterday of $36, but if sellers keep up the pace for just a few more days, the company could be trading at salvage prices by next week. Despairing news over the holiday weekend set up the avalanche of selling that buried BP stock when it began to trade Tuesday morning. Last Friday, the world had been transfixed by live images from the Gulf of Mexico seabed that showed oil continuing to gush out-of-control from the broken well despite BP’s efforts to plug it with a “top kill.” We now know that that mud sealant that was injected into the drill hole didn’t build up the necessary pressure to resist the gusher because the wellbore itself was ruptured. For all the good it did, the 1.2 million gallons of mud forced into the wellbore by a 30,000-horsepower piston might as well have been discharged directly into the sea. British Petroleum is facing criminal and civil charges as a result of the disaster, and it’s possible the company will not even be around in a year or two other than to pay claims. Although the world will undoubtedly get along just fine if that happens, the loss of Louisiana’s wetlands and the catastrophic damage to the Gulf ecosystem will not be so easy to bear. An estimated 20 million gallons of crude have poured into the Gulf so far, but that number could go much higher if the leakage continues until August, when it is expected that a second and third well will be operating to take the pressure off the existing well. Alaska, 21 Years Later In the meantime, environmental reports from Louisiana have been heartbreaking. The slick has coated delicate mangroves that jerry-rigged barriers have manifestly failed to protect, and aquatic life has literally been climbing out of the ooze for a gasp of air. Those who live and work along the Gulf are being prepared for the possibility that the effects of the damage will persist for decades, even if cleanup efforts achieve a superficial veneer of success. This evidently has been the case for the once-pristine Prince William Sound, Alaska, where a ruptured tanker, the Exxon Valdez, spilled near 11 million gallons of crude in 1989. Twenty-one years later, push a spade just a few inches into the beach and you will turn up rocks still coated with smelly oil. The Sound may look much as it once did, a local resident told the evening news, but appearances can be deceiving, and evidence of the disaster is still all around. We shouldn’t get our hopes up that the experience in the Gulf will be any better. *** Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2010, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Wednesday, 2 June 2010 | Digg This Article | Source: GoldSeek.com
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