Oil prices have risen again and this time it has been the biggest ever single gain. They jumped from $16.37 per barrel to an agonising $120. Not only will this have repercussions on investors, but it is yet again to set the daily living cost to a ridiculous rate including petrol, oil and diesel prices hitting the roof.
Back in July, when oil hit its all time high price of around $145 per gallon, panic struck, flights were being cancelled and people could not afford to drive. Airline such as XL even had to call it a day. But since then the price had steadily relieved its self and brought drivers alike some relief.
Analysts have been amazed at the shock of such a big inflation jump in one day. They blame this on the continuing crisis at Wall Street, and it looks as though we should tighten our belts, for a bumpy ride over Christmas and New Year. We have already seen 2 major companies on the brink of extinction AIG and Lehman Brothers, with AIG getting a last minute rescue from government authorities.
Monday's record rise reflected a type of trading fluke. By this I mean that it could be classed as a phenomenon called the short squeeze.
Consumer rights groups are also having there saying, as they are suggesting that with no war threat, pipeline leak, or ship wreck, there should be no reason for the prices to take such a dramatic turn.
As the world is set for more financial turmoil, we can only see things getting worse by the day, as there is no foreseen drop forecast in the near future for oil. As a matter of fact, it is only set to increase, as the November contract also rose to $109.37 a gallon, which is an increase of $6.62.
Bad weather may be an important aspect in the hike of oil prices. Hurricane hit places in America have had there productive facilities brought to a halt, bringing more damage to offshore oil and natural gases.
So where does this continuing inflation leave the world? Well it could be said that equipment should be made more energy efficient, and not use as much petrol or diesel. The new hybrid cars have hit the market, but not yet to a global audience. Maybe the world should look at this avenue, and efficiently market it, as we will one day be short of oil and then can you imagine the prices?
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