U.S. shares of oil company BP Plc rebounded more than 10 percent in early trade on Thursday, a day after plunging nearly 16 percent on mounting fears about how the company will cope with the massive costs of the oil spill in the Gulf of Mexico.

The company's London shares were down 6.1 percent to 367.7 pence, hitting their lowest level since 1997 as they caught up to the losses in the United States that occurred after the UK markets closed on Wednesday. See graphic on London vs U.S. shares: http://r.reuters.com/tug39k

Several analysts said the selloff in BP was not justified because the company still has ample cash reserves to cover the clean-up costs of the spill, but that the political pressures had created uncertainty in the markets.

It's tough to make price predictions on the stock, but I think the downside risks are outweighed by the near-term upside potential, said Mike Breard, analyst with Hodges Capital Management in Dallas.

Much of the activity in BP appeared to be linked to dealers trading the spread between U.S. and London shares, he said.

BP's American depositary shares were up 8.8 percent in early trade at $31.76 after hitting an early high at $32.35.

(Reporting by Matt Daily; editing by John Wallace)

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