Will US make BP pay?

Worries over the euro debt situation have faded away a bit but this episode is not over yet. Other EU countries could have some skeletons in the cupboard. BP's Credit rating downgrades by Fitch and Standard & Poors and solvency worries have basically sent share prices down south big time initially. Then the good news regarding new UK banking reforms and BP's suspension of dividends for the rest of this financial year and set up of $20bn (£13bn) escrow fund sent the share prices back up. Also the euro worries possibly contributed to the rise. Overall, this week has been a bit exciting in terms of volatility because generally good economic news from the UK overshadowed by worse than expected news from the US.

Regarding BP, I updated my analysis on Seeking Alpha taking into account of recent events. I still believe that the company does represent a good investment in the long term though some uncertainties still exist, namely the time required to plug the leaking well and total cost. 

The FTSE All-Share rose by 1.83% while my portfolio by 1.03%. The rise in the portfolio value was limited by falls in Norman Broadbent (NBB), which is the new name for GAR, and BP. My gain now stands at 0.35% (0.56% if additional holdings in NBB had not been bought). I think my eventual future gains will take a bit more time to become a reality because BP and the banks are out of favour. Therefore their share prices will eventually return to it's historical highs and it will happen again.

Full disclosure: Long BP