BP oil spill compensation increased by $5 billion

An announcement was made by Patrick Juneau that $5 billion had been paid out so far to the affected people and businesses of the 2010 BP oil spill in the Gulf of Mexico.

Mr. Patrick Juneau, BP plc administrator said, UK oil giant had paid out more than $5 billion in reimbursement claims to the victim of the biggest oil spill that happened in Gulf of Mexico.

An outburst on the Deep water Horizon penetrating rig, in Macondo near Gulf of Mexico, took the lives of eleven rig workers and spilled almost 4.9 million barrels of crude oil more than three months during the year 2010.

Mr. Juneau said in a statement issued on his website that that almost 62,162 people who claimed on the company had received $5.037 billion up till now as according to the part of the compensation agreement which was signed in 2012. The agreement stated that the company was required to pay around $7.8 billion in order to meet the claims arising due to the oil spill disaster.

However, later, the UK based oil major company said that it was not able to provide an exact calculation of the total cost of agreement. Earlier in February, BP said its forecast of the total settlement cost had extended to $9.9 billion.

The oil company has criticized that Mr. Juneau was not able to understand the   requirements of the deals and had paid the businesses that were not affected by the oil spill. However, the argument by the company was not accepted by the courts. Although, the company is no longer trying to dismiss him from his current position as he had made significant efforts to overcome fraud in the company.

As per the company, it has already spent approximately $28 billion in payments to the claimants that includes the early restoration work, the cleanup and response of the oil spill disaster.

In the meantime, BP is waiting for the Federal Court decision on the amount of penalty the company has to pay for breaking the Clean Water Act. On 20th April it will be fifth year of oil disaster.

It has been Five years since the oil spill incident took place in Gulf of Mexico. The incident resulted in more than 3 billion barrel of oil spill into the marine for almost three months.  Over 5 years has passed by, while the accurate cost of damages has still not been determined by anyone.

Earlier in January, it was estimated that the District Judge Carl Barbier can fine the oil company up to $13.7 billion.

BP plc. Stock closed at $42.55 after increasing by 0.31% on April 16.

Crude Oil Plummets Below $62 On Strong Dollar And Excessive Supply

Economists estimate that the Iranian crude output may increase at a faster pace after removal of sanctions

BP plc (ADR) - (BP) on March 25th was trading at a stock price of  $39.51 after being down at by 1.57% at -$0.63, during trading hours. Brent crude plummeted nearly 2% below $62 per barrel on Monday due to stronger dollar and reports which suggested that Libyan oil production will increase. Furthermore, Iran's statement seeking agreement about nuclear program, which could lifts sanctions on the country, would upsurge its crude oil.

Brent, the benchmark index for global crude oil prices, plunged by $1.28 to $61.8 per barrel and it was at $61.3 earlier in March. Future of Brent (LCOc1) climbed 18% last month, which is the highest monthly increment in almost six years.

West Texas Intermediate (WTI), the benchmark used to determine crude prices in the US, slid $0.95 to $48.81 per barrel.

Stronger Dollar

The dollar climbed the most in 11 years against the basket of major currencies, as a cut in Chinese discount rate, which reduced the value of yuan against dollar, and growing speculations that Fed will increase the bench mark rates in the US, boosted the dollar.   

The dollar index, dollar against a basket of major currencies, jumped up to 95.5 today, which is the utmost point since September 2003. After the most sluggish economic growth in 2014 in a decade and the rate cuts in China, the dollar climbed two-year high against yuan.

Dollar was appreciated due to depreciation of Kiwi and Australian dollar. Due to growth issues, Kiwi dollar has been down in recent weeks; however, cut in Chinese interest rates gave some cushion to the currency.

Libyan Crude Supply

In first two months of this year, crude received cushion from Iraq and Libya, two members of Organization of the Petroleum Exporting Countries (OPEC), as both of the countries lowered their crude production. However, recent reports suggested that Libyan crude production has increased over 400,000 barrels per day (bpd).

Upsurge In Iranian Oil Exports

Earlier today, the Foreign Minister of Iran, Mohammad Javad Zarif said in a statement, "If there is the political will to accept that agreement and sanctions cannot go together, then we can have an agreement this time."

The US and the European countries put sanctions on Iran for seven years, which restricted it from exporting oil, due to its nuclear program issues. The West believes the program has been initiated to create atomic weapons, while Iran claims that its nuclear program is peaceful.

Economists estimate that the Iranian crude output may increase at a faster pace after removal of sanctions and upsurge in its exports by nearly 1 million bpd. According to Thomas Reuters survey, Iran produced about 2.8 million bpd of oil during February.