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Record one-day jump in oil price | Record one-day jump in oil price |
(40 minutes later) | |
The price of oil has jumped by more than $16 to $120.92 a barrel, the biggest one-day gain on record. | The price of oil has jumped by more than $16 to $120.92 a barrel, the biggest one-day gain on record. |
Some traders believe that the US government's bail-out plan will help the economy, increasing demand for oil. | |
There is also uncertainty in the financial markets about how the plan will work, causing investors to switch to perceived safe havens such as oil. | |
There are also concerns about supply as production in the Gulf of Mexico is still affected by Hurricane Ike. | |
However, analysts said the US rescue package was key. | |
"[It] has changed sentiment in the oil market," said analyst Paul Harris from Bank of Ireland. | |
At one point during trading, the price of oil rose by more than $25. The volatility in the price has been exacerbated by the fact that the contract for the supply of oil in October expires on Monday. | |
The contract for oil to be delivered in November was not up as sharply. It rose by $6.62 to $109.37 in New York. | |
Last week oil traded as low as $91 a barrel. It had fallen from the peak of $147 a barrel it reached in July. |