Oil spill boost shares of recovery companies

By Ernest Scheyder

NEW YORK (BestGrowthStock) – The shares of companies that make products used to counteract the oil spill in the Gulf of Mexico jumped on Monday, as industry and government officials frantically tried to stop the crisis from growing.

Since the Deepwater Horizon rig exploded and sank last month, claiming 11 lives, hundreds of thousands of gallons of crude have been gushing into the Gulf from the ocean floor with no quick or easy solution.

With a huge oil slick threatening shipping, wildlife, beaches and one of the United States’ most fertile fishing grounds, President Obama has called the situation “a massive and potentially unprecedented environmental disaster.

That has boosted demand for products that can contain or dissipate the oil, such as oil booms, detergents and emulsifiers.

The shares of water treatment maker Nalco Holding Co jumped $2.56, or 10.4 percent, to $27.29 on Monday afternoon. The stock touched a 52-week high of $29.25 earlier in the session.

Erik Fyrwald, CEO of the Naperville, Illinois-based company, told CNBC his company is working with BP Plc to apply one of its proprietary chemicals that breaks down oil into small parts that can be eaten and dissolved by naturally occurring bacteria.

Fyrwald said Nalco has tested the chemical near the wellhead on the ocean floor — and plans to pump it directly into the wellhead — as well as on the ocean’s surface.

The product has a “beneficial impact” on cutting oil in water, the CEO said. But a spokesman told Reuters on Monday that, so far, the effect of the leak on sales has been “not material.”

Nalco competitors include divisions of Baker Hughes Inc and General Electric Co. GE shares rose 45 cents, or 2.4 percent, to $19.31, while the shares of Baker Hughes rose less than 1 percent. Baker Hughes makes products to help with drilling operations and recovery efforts.

Elsewhere, the shares of Superior Energy Services Inc rose $1.20, or 4.4 percent, to $28.26 after the company said it was contacted by BP to supply concrete domes that are placed over oil spills.

Shares of Clean Harbors Inc rose $6.52, or 10.3 percent, to $69.95 after setting a 52-week high of $70.50 earlier in the session.

The company, which specializes in oil spill recovery, works with the Coast Guard and other federal agencies.

Credit Suisse boosted its rating on Clean Harbors on Monday to “outperform,” forecasting the company will see a long-term revenue boost from the spill.

Other companies also stand to benefit from the oil spill cleanup, including oil boom and detergent makers.

Stock Market

(Reporting by Ernest Scheyder; editing by Andre Grenon)

Oil spill boost shares of recovery companies