By Gary Taylor in Houston, with Robert Perkins in London, Robert DiNardo in New York, Gary Gentile in Washington

'Everybody feels like we're done, and we're not': Obama

July 16 - With the flow of Macondo oil halted for more than 24 hours July 16, BP ended the 13th week of the Deepwater Horizon crisis with expectations it had finally reached its most significant milestone in the response.

Crucial pressure testing was scheduled to continue to determine whether BP would be able to effectively plug the runaway exploration well or use its recently installed sealing cap as a production system capable of diverting most of the escaping oil to vessels on the surface (ON 7/16).

Meanwhile, BP resumed work on its primary relief well that represents the ultimate Macondo solution through a targeted mid-August interception and bottom-kill of the Macondo wellbore at the reservoir more than 18,000 feet below the surface of the Gulf of Mexico.

The testing was scheduled to continue in six-hour intervals for about 48 hours to determine if the Macondo wellbore could sustain pressure readings of 8,000 to 9,000 psi that might allow BP to plug the well with its sealing cap while waiting on the relief well to administer the final kill (ON 7/13).

In a morning press conference, BP Senior Vice President Kent Wells said pressure had risen to 6,700 psi during the first 17 hours of closure, adding: "It's been a very steady build as would be predicted by the engineering analysis that we did."

Wells said: "You would expect it to build faster initially and then start to slow down with time, which is exactly what it's doing."

Working with a government technical team that includes Energy Secretary Steven Chu, BP engineers were closely monitoring the pressure tests and reviewing the results of seismic surveys to make sure nothing unexpected was happening below the sea floor.

Later in the day, National Incident Commander Thad Allen told reporters that the pressure had not risen any further, raising questions about whether it can hit the 8,000 to 9,000 psi threshold.

But Allen said he approved more testing into the weekend while adding some precautions that include the presence of a vessel from the National Oceanic and Atmospheric Administration to monitor for the possibility of escaping methane gas near the well.

He said science teams have discussed the possibility that Macondo has suffered some depletion of its reservoir after leaking for so long, raising that theory as an explanation for the stable reading of 6,700 psi.

But the retired US Coast Guard Admiral also said: "It is still on an upgrade consistent with a well that is shut in."

He also assured reporters that the response could move quickly if needed in the event of a sea floor breach to release pressure by venting oil through the choke and kill lines of the new sealing cap while bringing two collection vessels back for connection.

"There is no doubt there would be some discharge into the environment," Allen warned.

"We are continuing because we have positive indicators regarding how the pressure rose on a well with integrity that was being shut in," Allen said. "We are taking it one step at a time."

Investors responded to the July 15 closure of Macondo by boosting BP's shares 6% in London trading July 16 to their highest level since June 7.

BP has recovered around a third of the $100 billion in lost market value since its shares bottomed out on June 29, supported by speculation over a potential takeover bid, fresh investments from sovereign shareholders, progress on asset sales and hopes of plugging the Macondo well.

After jumping dramatically on July 15 in the US, BP shares closed down 5% on a widespread market decline at a price of $37.10 versus a 52-week high of $62.38 and a low of $26.75.

Those levels compare with a price of $59.48 on April 19, the day before the April 20 blowout at Macondo that destroyed Transocean's Deepwater Horizon drilling rig and created the largest marine oil spill in US history.

In their morning report, analysts at Houston's Tudor Pickering Holt noted that BP had "outperformed all day" on July 15 as the Macondo closure neared, pushing shares up 8% to close at $38.92 with a spike coming just after the oil flow stopped at 2:25 pm CDT.

Describing that jump as a "precursor to what happens when this well is finally killed and done," TPH also warned that "any hiccup has risk for spill-influenced stocks. So prepare for high volatility."

The Obama administration also continued to sound a note of caution pending the outcome of the pressure tests to determine the next step.

"I know there were a lot of reports coming out in the media that seemed to indicate, well, maybe this thing is done," said President Barack Obama, addressing reporters outside the White House. "Everybody feels like we're done, and we're not."

Obama added that, "we won't be done until we actually know that we've killed the well and that we have a permanent solution in place. We're moving in that direction, but I don't want us to get too far ahead of ourselves." Even after the well is brought under control, a massive cleanup effort remains, Obama said.

Obama said work is proceeding to compensate people hurt by the spill and that a $20 billion fund to pay claims is "working expeditiously."

"We've got an enormous amount of work to do and people down in the Gulf, particularly businesses, are still suffering as a consequence of this disaster," he said.

At the same time, BP announced that payments to "residents and businesses" on the US Gulf Coast have reached $201 million.

In a release, the embattled company said that more than 32,000 claimants have received "one or more payments in the past 10 weeks." Among the largest groups include fishermen, "who have received $32 million, and shrimpers, who have received $18 million," BP said.

BP added it has paid around $77 million "for loss of income to a variety of occupations including deckhands and employees of seafood processing plants and other businesses."

All collection of Macondo oil was suspended July 15 with a total of 804,800 barrels collected through three containment systems installed between the middle of June and as recently as this week.

The most recent addition to that system, the Helix Producer I floating production vessel, was just beginning to ramp its collection when BP disconnected the vessel July 15 for the pressure testing.

A government panel has estimated the Macondo flow at a rate of 35,000 to 60,000 b/d.

But vessels are poised to resume collections as soon as possible to provide capacity for diverting 50,000 to 80,000 b/d if BP and the government technical team choose containment as the preferred option for waiting out the relief well.

Allen has said the new sealing cap would function as a second, smaller blowout preventer positioned atop Macondo's original malfunctioning BOP to provide multiple connection-options for diverting oil from the Macondo wellbore to four different production vessels on the surface, 4,993 feet above the wellhead.