Shares of BP bounced off a 14-year low Thursday, rising 9 percent, as the oil giant assured investors that it can deal with the cost of the giant oil spill in the Gulf of Mexico.
Investors were also encouraged by a note from a Citi Investment Research analyst, who kept a "Buy" on the shares.
Shares of BP jumped $2.65, or 9.1 percent, to $31.85 in Thursday morning trading. Shares dropped 16 percent to $29.20 on Wednesday — the worst day for BP shares since the Deepwater Horizon rig exploded seven weeks ago — and the lowest price for the stock since 1996.
Wednesday's losses cut the company's market value in half since then, a drop of $90 billion.
Political pressure is building on BP to slash its dividend or suspend it altogether until the well is capped and hundreds of miles of coastline have been cleaned up. Some investors worry the billions of dollars in liabilities could wipe out the company.
In a research note Thursday, Citi Investment Research analyst Mark Fletcher said that BP's shares are undervalued.
"Financially, there is no reason why BP can't accommodate both dividend payments and comfortably respond to Gulf of Mexico obligations," he said.
BP has already spent more than $1.4 billion BP trying to contain and clean up the oil and pay claims to Gulf coast businesses.
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