Oil Stocks Sink as BP Oil Spill Continues to Gush

(BP, Anadarko oil spill story updated for Tuesday close, Holder criminal probe)

NEW YORK (TheStreet) -- Shares of BP(BP) and all the energy stocks involved in the BP oil spill suffered to start the holiday-shortened week on Tuesday. BP conceded failure over the Memorial Day weekend in its top kill effort to stop the oil leaking from the compromised underwater well. Holiday weekends are often used by corporations to hide bad news, but there was no hiding the failure of the BP top kill.

BP shares ended Tuesday's trading session down 15%, with more than 119 million shares traded, four times the BP trading volume average. There has only been one other day, since the oil rig explosion on April 20, on which BP shares have traded at a higher volume -- May 3, when 156 million shares of BP were traded. Anadarko Petroleum(APC), though, was an even bigger loser than BP, ending Tuesday down close to 20%. Close to 45 million shares of Anadarko Petroleum were traded, versus an average daily volume of under 10 million for Anadarko, which owns 25% of the BP Deepwater Horizon well.

Anadarko's 25% stake in the BP well means that it has 25% liability for what many on the Street expect to be unquantifiable damages and liabilities stemming from the oil spill. Yet it wasn't until the BP top kill failed -- and essentially signaled that BP won't be able to stop the oil from gushing for months to come -- that Anadarko had a day as bad as Tuesday.

>>Oil Spill in Pictures

The most daily volume in Anadarko shares since the oil rig exploded on April 20 was approximately half the level of Tuesday's trading. After Tuesday's $10.23 slide in Anadarko shares, the oil company has declined from over $72 on April 20 to $42.10 at the close on Tuesday, a decline of 42%.

Congress has already introduced legislation to up the liability cap from $75 million to $10 billion and retroactively include the BP oil spill in new liability cap. Yet the real issue may be the Obama administration Attorney General Eric Holder arrived to the Gulf Coast on Tuesday. If there is a criminal conviction against BP and the additional owners of the well, there would be no cap on liabilities. Attorney General Holder officially announced a criminal probe at the close of the market on Tuesday.