It was a week where oil prices fluctuated wildly to maintain status quo and natural gas plummeted to its lowest settlement since June 2012. On the news front, BP plc (BP – Analyst Report) will pay a record $20.8 billion as penalties for the deadly oil spill of 2010, while Suncor Energy Inc. (SU – Analyst Report) launched a hostile bid to acquire Canadian Oil Sands Ltd. for C$4.3 billion.    

Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures remained essentially unchanged at $45.54 per barrel, natural gas prices plunged 6.8% to $2.45 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Energy Transfer to Buy Williams, Shell Stops Arctic Drilling.)

The disappointing jobs report put a big question mark over the health of the U.S. economy and clouded the demand outlook for oil, in the process dragging down the commodity. However, crude recovered most of its losses by Friday, buoyed by the Baker Hughes rig count data that showed another drop in oil-directed rigs – now at their lowest level in more than five years – indicating a break in shale drilling activities.

Natural gas though fared badly and dropped to a 3-year low on predictions of waning heating requirement with the imminent arrival of colder autumn temperatures. Speculation is also rife that benign weather will delay the onset of peak heating demand season.

Recap of the Week’s Most Important Stories

1.    In the largest settlement in history of U.S. Justice Department, British energy major BP plc – the company responsible for the disastrous 2010 Gulf of Mexico oil spill – will have to shell out a record $20.8 billion to resolve almost all claims associated with the accident. The amount is considerably higher than the $18.7 billion BP was supposed to pay as per the previously announced deal.

To be paid in installments over an 18-year period, the new total includes $7.1 billion in natural resource damage claims under the Oil Pollution Act, $5.5 billion in Clean Water Act penalties, and $4.9 billion in payments to the affected states.