A day after BP chief executive Tony Hayward was given a public mauling by US lawmakers, a top credit agency slashed the creditworthiness of the British energy giant because of the "worsening impact" of the disaster on its finances.

Moody's Investors Service cut BP's credit rating by three notches to A2 from Aa2 following a similar move by Fitch and Standard & Poor's this week.

"The rating agency believes that uncertainty over the ultimate cost for massive litigation claims and other contingent liabilities will be an overhang on BP's creditworthiness that will persist for years to come," it said.

It was another slap in the face for the British company, which this week agreed to set aside 20 billion dollars in an escrow fund over the next four years to pay compensation to the stricken Gulf residents.

A day after being summoned to the White House by President Barack Obama, Hayward was pilloried by US lawmakers Thursday investigating the causes of the April explosion which destroyed a BP-leased rig off Louisiana.

To the frustration and anger of the House panel, he repeatedly refused to be drawn on the causes of the explosion and whether there had been any negligence on BP's part, drawing lawmakers' ridicule and scorn.

US experts believe between 35,000 and 60,000 barrels is spewing into the Gulf every day from the ruptured wellhead, and creeping ashore in four southern US states shutting down the fishing industry and sullying tourist beaches.

Seeking to end a nightmare week on a high note, officials said BP was now containing more of the spill as it works towards to capping it for good.

"In the 24-hour period ending at midnight last night, we were able to recover 25,000 barrels of oil," Thad Allen, the US Coast Guard admiral coordinating the response to the worst oil spill in US history, told reporters.

Allen said the flow rate technical group estimates the flow to be "right now, the mid-30s -- I think is the most probable -- and as high as 60."

And he stressed the first of two relief wells, seen as the only way to permanently cap the spill, was closing in on the original well.

"The first relief well is now 10,677 feet (3,235 meters) below the sea floor (and) starting to close in on the well," Allen said, without providing a time frame for when it would be completed.

On Thursday Allen said engineers were ahead of their mid-August target date for completing the drilling of the first relief well.

In a sign of the growing global impact of the worst environmental disaster in US history, the intergovernmental International Energy Agency (IEA) warned against following the US lead and imposing a moratorium on offshore drilling.

Global oil output could slide by up to 900,000 barrels a day from projected levels for 2015 if oil producing countries take their cue from the six-month moratorium imposed by Obama in the wake of the disaster.

"If other countries like Angola, Brazil and the North Sea (countries) put on hold new offshore development and there is also one or two years of delay, the impact on global oil output might be 800,000 barrels a day to 900,000 barrels a day by 2015," IEA executive director Nobuo Tanaka told Dow Jones.

"There is little near-term impact. But for the medium term, if new offshore oil development in the US is delayed by one or two years, the impact (on production) would be 100,000 barrels a day to 300,000 barrels a day by 2015," Tanaka added.

London investors however shrugged off BP's nightmare week sending shares soaring, up 4.09 percent to 374.3 pence in late trading, having already gained 6.74 percent in value on Thursday.

The London-listed energy group has been given "a fairly major rap on the knuckles," said analyst Richard Hunter at the Hargreaves Lansdown brokerage.

But he added: "The market has taken some comfort from at least being able to put some figures on the spill and clarity on the dividend position."

earlier related report
Oil spill threatens, but the party goes on in famed Key West
Key West, Florida (AFP) June 18, 2010 - Sunkissed by Florida's generous rays, Hill and Robert Causey are ready to leave the beach and head to Key West's bars, untroubled by the nearby Gulf of Mexico oil spill.

On Duval Street, in the heart of the city, shops are offering scuba diving trips to local coral reefs, but also t-shirts cursing BP for the disastrous spill that threatens livelihoods in this tourism-dependent city.

Robert Causey, in town with his wife from the neighboring state of Georgia, headed into "Sloppy Joe's," a mandatory bar stop for vistors to Key West.

"Everybody is happy here, we don't care about the oil," he says. "You know what's worrying us?" he quips. "The beer spilled."

"Sloppy Joe's" competes with "Captain Tony," just a few meters away, over which is the bar that was favored by American writer and Nobel laureate Ernest Hemingway, who lived in the city.

The place is packed long before sundown, with live bands playing classic country and rock tunes to enthusiastic patrons.

In a month, on July 22, the bar will host its annual Hemingway lookalike contest, just one of many events held in the city to honor the American author.

"People come to Key West to party and enjoy the unique spirit of this city," says Ben Dennis, who brings tourists to the town from Miami and other places in Florida.

He says visitors are attracted by Key West's exciting history of piracy, its old ties to Cuba, the plentiful diving options and the sense of having reached a far corner of the United States, which draws motorbike riders from across the country.

Among the city's more unusual haunts is the "Garden of Eden," a bar featuring a second-floor open air terrace where customers are encouraged to imbibe their beverage of choice in the buff.

That spirit of fun has helped draw tourists to the city from far and wide, but Dennis fears that potential visitors will now be scared off by the threat of the oil spilling into the Gulf of Mexico.

"I see less people coming to Key West, probably it's the oil spill," he said.

Florida's Governor Charlie Crist has expressed fears that the state's key tourism sector will take a hit because of the spill, but the local Key West tourism office insists no effects have been seen yet.

"Nothing has changed, everything is the same as it was before the accident," said Andy Newman, stressing that the city has been unharmed by the thousands of barrels of crude pouring from beneath the wreckage of the Deepwater Horizon oil rig.

"We have not seen the first tar ball and we have not seen the first of anything from the spill," he said.

Other coastlines have not been so lucky, and in Louisiana delicate marshland habitats are clogged with thick oil, producing horrifying photos of dying animals that have been splashed across the news.

US government scientists believe that anywhere between 30,000 and 60,000 barrels of oil have gushed into the ocean each day since the spill began in late April.

The latest projections by the National Oceanic and Atmospheric Association puts the edge of the slick some 300 kilometers west of Key West, and the state has also been placed on emergency footing.

The local health department stresses there are no advisories currently in effect but that may not be enough to persuade the roughly 2.2 million tourists that come to Key West each year not to reschedule their visit.

For Toby, a local fisherman, the oil spill's potential for disaster is devastating.

"It's hard to survive in the Keys. All we got is tourism and fishing. If the oil spill comes and kills both industries, it's the end, we are grilled."

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