By Houston Business Journal

Shares of BP Plc rose by nearly 9 percent Tuesday after the London oil giant said it would be able to cover the costs of the oil spill in the Gulf of Mexico without selling new shares and in the wake of an analyst upgrade.

BPâ¿¿s stock closed Tuesday up 8.7 percent, or $2.56, to $31.91 - reversing a downward trend since the April 20 Deepwater Horizon explosion and subsequent massive oil spill. Shares closed at $60.48 on April 20 and have since traded as low as $26.75.

The upward swing took place despite rumors of government-owned funds in the Middle East possibly investing in the company so that it can avoid an outright takeover.

Last week, BP (NYSE: BP) was the target of takeover talk with Exxon Mobil and Royal Dutch Shell named as potential suitors.

The company has so far spent $3.12 billion on cleaning up the spill, which has devastated the Gulf coast.

Yet RBS raised BP to ⿿Buy⿝ from ⿿Hold,⿝ according to the Wall Street Journal.

RBS, notes WSJ, believes that the spill could cost BP somewhere between $16 billion and $67 billion and the company has already lost some $60 billion in value compared with its peers.

The Houston Business Journal is providing continuous coverage of the Gulf oil spill, which over the holiday weekend reached the Texas coast for the first time.

Copyright 2010 American City Business Journals
Copyright 2010