In a startling turn of events, Shell has officially squashed rampant rumors about a potential acquisition of BP, following a media frenzy that sent BP's stock soaring earlier this week.

On Wednesday, a report from The Wall Street Journal suggested that Shell was engaged in early-stage discussions to buy its British counterpart, leading BP shares to pop nearly 7% before settling back down. However, Shell swiftly dismissed these claims as mere 'market speculation'.

On Thursday, Shell reiterated its stance, clarifying to the markets: "We haven't actively considered making an offer for BP, and there have been no talks or approaches made regarding a potential bid." This statement confirms Shell's commitment to adhere to UK market regulations, which prohibit them from making an offer for BP in the next six months.

Despite the denial, Shell left a small window open for future possibilities, hinting that should a third party show substantial interest in approaching BP, or if any significant changes arise in the market, they could reassess their stance.

The recent speculation has also been fueled by BP's lackluster performance, with weak financial results in the first quarter casting doubt on its future. Analysts have long speculated about potential takeover bids for BP, especially from Shell.

Shell's CEO Wael Sawan stated last month, "Before considering any significant acquisitions, we must ensure our own house is in order." He emphasized that the company's focus right now is on creating value internally, suggesting that their priority lies in stock buybacks rather than mergers.

As the market watches closely, investment banks and analysts are already crunching numbers on what a Shell-BP merger could look like. Would this create a powerhouse in the oil and gas industry, or is it a long shot? Stay tuned for more updates!