Here we go again ... oil prices have skyrocketed / File picture
Oil price rise is biggest one-day jump
Meanwhile, Wall St takes a battering
Aussie market set to fall this morning
THE price of oil skyrocketed by more than $US16 overnight - the biggest ever one-day jump - as the global financial crisis saw another major rout on Wall Street.
At one stage the crude oil price was up $US25 and, even though it fell back, the price surge easily eclipsed the previous record for a single day - $US10.75 on June 6.
The dramatic climb came as shares plunged yet again on Wall Street and in Europe, setting the scene for more losses when the Australian market opens this morning.
The Dow Jones Industrial Average slid 372.03 points (3.27 per cent) to 11,016.48 at the closing bell as markets gave back the gains from a big rally on Friday.
The Nasdaq composite slumped 94.92 points (4.17 per cent) to 2178.98, and the Standard & Poor`s 500 index shed 47.90 points (3.82 per cent) to a preliminary close of 1207.18.
Investors were struggling to sort out the implications of the huge bail-out proposed by President George W. Bush to stabilise the banking industry and financial institutions.
Desperate times, desperate measures
Some analysts said first details of the plan revealed it was more complex than anticipated.
"Although the plan seems likely to gain final approval, worries remain that the proposal by the US Treasury Department could face delays and undergo changes as it makes its way through Congress," analysts at Charles Schwab & Co said.
Paul Nolte, an analyst with Hinsdale Investments, said: "While desperate times require desperate measures, this might be a bit too desperate."
In Europe, London`s FTSE 100 index shed 1.41 per cent to close at 5236.26 points.
The Paris CAC 40 fell 2.34 per cent to 4223.51, and the Frankfurt Dax lost 1.32 per cent to 6107.75.
The market dramas reflected anxiety over Washington`s $US700 billion ($840 billion) bail-out plan, a weak dollar and - in the case of oil - an expiring crude contract, the Associated Press reported.
"We`re off to the races again," it quoted Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, as saying.
"There`s a renewed scramble for commodities because of a general weakness in the (US) dollar." Oil and other commodities are traditionally seen as safer investments when the US currency weakens.
New York`s main contract, light sweet crude for October delivery, jumped $US16.37 a barrel higher to close at $US120.92.
So the average Joe pays more for oil at the bowser when rich investors buy more shares/stocks (whatever you call it)in oil commodities.I ' llsay we all put our super in oil commodities since thats only thinggoing up. No wonder why we have not moved awayto an alternative fuel!
Posted by: Mark of Sydney 6:46am today
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