NEW YORK --- Oil prices spiked more than $25 a barrel Monday, Sept. 22, the biggest one-day price jump ever, the Associated Press reported. The price surge was prompted by anxiety over the government's $700 billion bailout plan for the financial markets.
Light, sweet crude for October delivery shot up as much as $25.45 to reach $130 a barrel on the New York Mercantile Exchange before falling back to trade at $122.60, up $18.05, AP reported. The contract was set to expire at the end of the day, which added to the volatility. The October price began accelerating sharply in the last hour of regular trading.
The November contract is scheduled to become the front-month contract at the end of Monday's session. It was trading at $108.80, up $6.05.
Crude has gained about $40 in a dramatic four-day rally that has at least temporarily halted oil's steep two-month slide below $100. At this rate, crude is within reach of its all-time record of $147.27, reached in July.
"We're off to the races again in crude," Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill., told AP "There's a renewed scramble for commodities because of a general weakness in the dollar."
The Nymex temporarily halted electronic crude oil trading after prices breached the $10 daily trading limit. But trading resumed seconds later after the daily limit was increased.
The huge rally may shatter crude's previous one-day price jump of $10.75, set June 6. Oil's sharp gains came as energy traders grappled with the implications of the government's proposed $700 billion plan to stem the U.S. financial crisis.