As noted on Twitter this AM, government estimates on the BP oil spill have been raised again, with the Obama administration now claiming 60,000 barrels a day are flowing into the Gulf.
We've been following these estimates with interest, noting earlier this month that estimated spill numbers seem to be purposefully climbing higher towards Matt Simmons' earlier call of 120,000 barrels/day.
Simmons made his call on the BP spill's magnitude toward the end of May in this Financial Sense Newshour interview. That estimate seemed to echo a report from Purdue University engineering professor Steve Werely, and today Matt Simmons is on Bloomberg repeating the 120k barrels/day estimate, citing research from a report published on Sunday.
If you're curious about what the credit markets are saying about BP's future, here's a snapshot from Weekly TA on the CDS market's reading. WSJ reports that CDS on BP debt climbed to a record 625 basis points Wednesday, before settling back down to 565 basis points on news of a deal with the US government over its spill liability.
BP has agreed to fund a $20 billion escrow account to cover damages to those affected by the spill, though White House adviser David Axelrod claims there will be "no upward cap" on the fund or BP's liability.
The news for BP and our environment just keeps getting worse. If I were a BP shareholder (no position), I'd stop worrying about a return on capital and start worrying about a return of capital at this point.
Related articles and posts:
1. Gregor MacDonald and Howard Lindzon on BP fiasco - Stocktwits TV.
2. BP's deepwater oil spill - why flow rates are increasing - The Oil Drum.
3. Simmons & Co. cuts ties to outspoken founder - Reuters.