BP's stock has been gushing red ink

BP's stock has been gushing red ink as investors view the fallout from a leaking oil well through a barrel-half-empty prism.
With BP's stock down more than 40% since the April 20 rig disaster in the Gulf of Mexico, is it screaming, "Buy me, I'm on sale," or warning, "Sell me, more risk ahead"?

BP rebounded 12% Thursday and another 3% on Friday after a 16% drop Wednesday. Analysts attributed the rally to a report from an Asian firm, Standard Chartered, which said it makes sense for PetroChina, the Chinese oil company, to buy BP.

But BP still presents a dilemma for investors: Buy or sell a stock in crisis?

•The bearish case. Given that there are still so many unknowable, unquantifiable facts surrounding BP and the oil spill, now isn't the time to dive headlong into the stock, despite its steep drop, says Philip Weiss, senior energy analyst at Argus Research.

BP still hasn't plugged the leak, so the full extent of the environmental damage is unknown. There is no way to know how much BP will have to spend to clean up the mess and other related costs.

As a result, "Taking a short-term position in BP amounts to speculation, not investing," Weiss says.