BP Climbs Higher in Anticipation of Deepwater Horizon Report

BP (NYSE:BP) is climbing higher today in anticipation of a U.S. government report expected to spread the blame for the Deepwater Horizon oil spill between the oil company and its many contractors. Though the report won’t eliminate BP’s liability for the spill, it will remove some of the uncertainty around the April 20, 2010 accident.

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The report, expected to be released today, will contain 50 recommendations on how oil companies should change offshore drilling practices. The report is the culmination of a 17-month federal investigation into the blast at the Deepwater Horizon rig on BP’s Macondo well, which killed 11 workers and resulted in the worst oil spill in U.S. history.

BP’s shares are up nearly 3% today, while Halliburton (NYSE:HAL), which performed cement work on the well, has fallen 2.7%, and Transocean (NYSE:RIG), the owner of the Deepwater rig, is relatively flat today. The NYSE Arca Oil Index is down 0.73% this morning as of 11:11 a.m. EDT, while the NYSE Arca Natural Gas Index is down 0.70% and the Philadelphia Oil Service Index is down 0.60%.

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Also trading down today is oil and gas producer EOG Resources Inc. (NYSE:EOG), after analysts at Sterne, Agee & Lynch downgraded the stock to underperform. Analysts said EOG may have to raise capital in order to meet its plan to increase production of natural gas liquids. “We feel this dilutive action can cause underperformance compared to the peer group,” said Stern, Agee & Lynch analysts, who also cut their rating on Denbury Resources Inc. (NYSE:DNR) to underperform. “We believe that in 2012 Denbury Resources will begin to accelerate its Rockies enhanced oil recovery build-out,” analysts said. “The corresponding capital requirements…could cause the equity to underperform within its peer group.”