Crude oil prices in record one-day rise

23 September 2008

Oil prices in the US made a record one-day gain on Monday amid fears that a planned $700 billion (£378 billion) government financial aid programme will lead to rising debts.

The futures market had at one point jumped over $25 in one day to $130 - a record gain - before eventually closing at $120.92 a barrel, a rise of $16.37 on the day.

However, the rise has been attributed to the expiry of a benchmark monthly oil futures contract, which led some traders to cover short positions.

Phil Flynn, analyst at Alaron Trading told Business Weekly: "Someone [who] was short had to cover his positions on the last trading day and got squeezed.

"That definitely caused the market to run up," he added.

The rise was exacerbated by fears over the US economy as traders moved away from the falling dollar towards commodities.

Home heating oil prices are likely to rise as a result of the jump, although the oil market is currently fluctuating wildly amid concerns over a global recession.

Only last Tuesday oil prices touched a seven-month low of $94.13.

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