TBO.com - TBO is Tampa Bay Online

Bailout Fears Drive Oil Up $16 A Barrel

ADVERTISEMENT

The Associated Press

Published: September 23, 2008

The Dow plunged Monday more than 370 points and oil prices rocketed more than $25 a barrel - the biggest one-day jump ever - as anxiety about the government's $700 billion bailout plan sent new shockwaves through the markets.

Light, sweet crude 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.

The rally, which shattered crude's previous one-day price jump of $10.75, set June 6, showed the intensity of emotion in the 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.

Phil Flynn, analyst and oil trader with Alaron Trading Corp. in Chicago, said the surge in oil appeared to be the result of a large investment fund scrambling to cover their short positions, or bets that prices would fall. "When people sense that someone is short, it's like blood on the streets. It just accelerates the rally," Flynn said.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT