BP plugs oil leak in Gulf of Mexico

After nearly three months of more misses than hits, British Petroleum said it has managed to plug the well that was gushing oil into the Gulf of Mexico.

"It felt very good to see no oil going into the Gulf of Mexico," BP senior vice president Kent Wells told a briefing on Thursday.

He added that the company will be consulting with scientists and government officials every six hours to assess if the test was working. With several failed attempts in the past to stop the leakage, President Barack Obama has been cautious about his assessment of the latest development.

"I think it is a positive sign", he said, "Were still in the testing phase. I will have more to say about it on Saturday."

Despite the initial success in tamping down the oil flow, no-one is giving the all clear signal just yet and the testing for oil pressure will continue for two days.

"Its not the time to celebrate", Doug Suttles, chief operating officer for BP, said on television.

Louisiana Governor Bobby Jindall, whose state is among the five gulf states to be hit by the leak, in a statement to the tv channel CNN, said that he was "cautiously optimistic" as the test proceeds.

"Work to revitalise our coast won't be done until our waters and our shores are completely clean and our wildlife, our communities and our coastal industries are 100 percent restored", he said.

If the cap is working, then the pressure inside the well will rise. But a low pressure would mean that there is a leakage somewhere else, which will allow the oil to escape into the sea.

The test, if successful, will prevent further pollution into the Gulf of Mexico even as millions of litres of crude oil continues to float in a thick layer over its waters.

"What were trying to do now is to get physical evidence because we dont know the condition of the oil bore and the way you do that, is metaphorically put your thumb over the garden hose", Thad Allen, who is heading the US response to the environmental disaster, told reporters.

Meanwhile, the Wall Street Journal has reported that BP's US shares surged after the news of the oil giant having stemmed the seepage. BP's American depositary shares closed up 7.6 per cent at $38.92, the stock's highest level since June 4, the paper said. The company stocks, after hitting a 14-year-low of $26.75 in late June this year, on Thursday recovered 36 per cent of its slide since the April 20 explosion.

"The stock is starting to price in the fact that they are eventually going to get this leak stopped", said Andrew Fitzpatrick, director of investments at Hinsdale Associates, "They seem to be a little ahead of schedule with that."