The Daily Telegraph (UK) has today reported that Barack Obama’s ‘excessive’ criticism of BP in recent days caused severe damaged to the future of pension funds in the UK. As a result of Obama’s comments the share price of BP plunged 4% in London. Investors in London today said his comments were putting the pensions of millions at risk; this comes on a day when the total value wiped of the shares of BP now totals £49bn.
As a result of BPs position at the top of the London Stock Exchange almost every pension fund in the country relies on the company’s reliability, which has been severely undermined as a result of the Gulf Oil spill, which has now dragged on for 51 days. It is the company’s dividend which accounts 1/6 of UK pension fund or £7bn a year that is under serious threat. A White House spokesman said it was the Presidents job to keep his ‘boot on the throat’ of BP, which has led the President to put additional pressure on BP to cut or abandon is dividend payment altogether. This ‘excessive’ rhetoric from the US administration has prompted business in the UK to say that a continuation of this rhetoric could damage transatlantic relations.
All this was made worse when highly respected energy analyst at Simmons & co Matthew Simmons commented that BP may not be a public company by the end of the summer. This sent the ADR listed shares of BP listed in New York plummeting 15%, which puts them at a 14 year low. This will no doubt have knock on effect when the London markets open again later today.