Leak containment buoys BP shares | Noosa Money, Business and Property | Business News for Noosa, Australia

SHARES in BP shot higher and then retreated in London on Friday as the market veered between hope and caution over encouraging early signs of progress in stopping the Gulf of Mexico oil leak.

BP said it had stopped the leak on Thursday night, but that was only the start of up to 48 hours of tests to determine whether the cap would hold.

BP shares finished up 5.4 per cent at 407.15 pence after zooming as much as 8 per cent higher in early trading, then retreating at one point to 403.7 pence.

Still, the oil company's shares were up by more than a third since briefly falling below 300 pence late last month.

Jonathan Jackson, head of equities at Killik and Co. in London, said a bout of profit-taking was understandable given the share price rebound since late June and continued uncertainty about how much the company will be damaged by the Gulf disaster.

"Only once the flow of oil has been stemmed can the market begin to gain some visibility over the cost of the cleanup and potential liability for damages," Jackson said. "However, the latest announcement brings this point ever closer."

The company remained cautious, saying: "Although it cannot be assured, it is expected that no oil will be released to the ocean during the test. Even if no oil is released during the test, this will not be an indication that oil and gas flow from the well bore has been permanently stopped."

BP is drilling two relief wells to permanently stop the flow of oil.

British Prime Minister David Cameron welcomed BP's progress in capping the well. He said the company would benefit if it could know the full scale of its liabilities for the economic losses caused by the accident.

"It seems as if they have had, touch wood, some success in the last couple of days," he said on Friday after meeting with BP chairman Carl-Henric Svanberg at 10 Downing Street. "They want to clean up the mess, they want to pay compensation to ... everyone who has been affected. But they do need some sort of certainty that the compensation claims won't go into tertiary and sort of further claims which aren't really related to the mistakes that BP made."

Cameron will make his first official visit to Washington next week.

As of Monday, BP said it had spent $US3.5 billion ($A4 billion) dealing with the disaster, which began on April 20 with a fire and explosion aboard the Deepwater Horizon drilling platform. That caused a break in a pipe nearly 1.6km deep.

BP says the total spending included nearly $US165 million ($A187 million) on individual claims. It agreed to set up a $US20 billion ($A22.6 billion) fund to cover potential costs, and suspended share dividend payouts for the rest of this year.