Thursday seems like an odd day for energy investors to be celebrating. The oil spill in the Gulf of Mexico has been declared the largest in U.S. history, and U.S. President Barack Obama has declared a tough stance against the oil industry: Regulations are going to be tougher, applications to conduct exploratory drilling in the Arctic have been suspended until 2011, and BP PLC will be held responsible for the spill's cleanup.
Despite this backdrop, it was hard to go wrong with an energy-themed investment. BP shares rose 5.4 per cent in afternoon trading, the biggest percentage jump in more than 14 months. Transocean Ltd. - the offshore drilling contractor behind BP's failed oil rig - saw its shares rise 1.8 per cent.
Meanwhile, the S&P 500 energy index rose 3.5 per cent. Canada's S&P/TSX energy index rose 3 per cent. And crude oil itself rose 4.2 per cent, which follows a 4 per cent gain on Wednesday.
Still, these gains aren't coming from nowhere. Global stocks were in all-out rally mode, following upbeat comments from China that appeared to alleviate some of the concerns about the health of Europe's monetary union.
As well, reports suggest that BP's latest attempt to the stop the flow of oil into the Gulf of Mexico - a gusher that has gone on for five long weeks - appears to be working. Despite the environmental disaster, investors might be relieved that the worst is over.
David Berman