BP denied a rumor, which helped lift the share price in London, that the gushing leak had finally been capped.

Alex hit land as a hurricane over northeastern Mexico late on Wednesday, well to the west of the spill site, but its high winds and rough seas delayed the British energy giant's plans to expand the volume of oil it is siphoning from the well.

The bad weather also threatened to push more oil-polluted water onto the U.S. Gulf Coast shore and forced the halt of skimming, spraying of dispersant chemicals and controlled burns of oil on the ocean surface.

The worst oil spill in U.S. history is in its 73rd day. It has caused an environmental and economic disaster along the Gulf Coast, hurting fishing and tourism industries, soiling shorelines and killing wildlife.

Talk that BP had managed to cap the leak helped a spike in the UK-based company's London share price on Thursday, but BP officials shot down the rumor.

"That would be really good news, but that's not the information we have," BP spokesman Mark Proegler said. Another BP official said the target date for relief wells to intercept and plug the blown-out well remains early to mid-August.

BP shares were up around 2 percent in trading in New York.

"I think if you're going to buy BP, you have to buy it before the well is capped, and that's what some people are thinking right now," said Mark Coffelt, chief investment officer of Empiric Funds in Austin, Texas.

"It's been spiking on misinformation, it's hard to know how guilty the company is, how much it can be held liable for."

BP's market capitalization has shrunk by about $100 billion and its shares have lost more than half their value since the spill began following an explosion on the drilling rig on April 20, but have shown signs of stabilizing.

Pacific Investment Management Co. (PIMCO), which manages the world's biggest bond fund, said on Thursday it is buying more debt of some of the companies involved in the oil spill disaster, though it did not cite specific corporations.

Separately, Mark Kiesel, head of the PIMCO corporate bond portfolio management group, wrote in a U.S. Credit Perspectives article on the company's web site on Thursday that the possibility of BP filing for bankruptcy was "highly unlikely."

He wrote that the company had hefty amounts of cash on hand, strong operating cash flow and could sell assets to raise money if needed.

President Barack Obama was scheduled to meet with senior U.S. officials later on Thursday to review the spill situation and oil containment plans, the U.S. Coast Guard said.

The U.S. House of Representatives' Transportation and Infrastructure Committee met to negotiate proposed legislation that would hold vessels and facilities more accountable for oil spills. That is one of several bills to target the drilling industry making their way through Congress.

Share

Photo Copyright Getty Images

Copyright 2010 Reuters. click for restrictions