Biggest One-Day Oil Price Jump in History

crude oil

Source: AP/Yahoo! News
September 22, 2008

Oil prices jumped more than $25 a barrel Monday – the biggest one-day price jump ever – as anxiety over the U. S. government’s $700 billion bailout plan and the weak American dollar continues. Crude oil for October delivery jumped as much as $25.45 to $130 a barrel on the New York Mercantile Exchange before falling back to settle at $120.92, up $16.37. Crude oil’s previous one-day price jump of $10.75 a barrel, set June 6 of this year, showed the intensity of emotion in the stock market. The Nymex temporarily halted electronic crude oil trading after prices breached the $10 daily trading limit. (Trading resumed seconds later after the daily limit was increased.) The November crude contract, which became the front-month contract at the end of Monday’s session, was trading at $108.69, up $5.94, still a sharp gain. Crude oil prices have gained about $30 a barrel in a dramatic four-day rally. At this rate, crude is within striking distance of its all-time record of $147.27, reached in July.

Oil’s sharp gains came as energy traders grappled with the implications of the government’s proposed $700 billion initiative to stem the U.S. financial crisis by absorbing billions of dollars of banks’ bad mortgage-related securities. Anxiety over the plan also sent stocks sharply lower Monday; the credit markets were calmer than they were last week, but still showing the effects of investors’ nervousness. There is still a great deal of uncertainty about what long-term impact the U.S. rescue plan will have on energy demand. Oil’s peak prices in July and a weak U.S. economy has forced Americans to cut back on their driving and recreational use of bulk motor oil, also leading business to scale down operations.

Did you like this? Share it:

Comments