After the market implosion last week and lack of action in Congress, oil experienced the largest one-day increasey in NYMEX history going from $104.55 per barrel to $130, finally closing at $120.92 between Friday's and Monday's close as investors retreated again into commodities. The Air Transport Association (ATA) reacted, stating that this record increase reaffirms that speculation is playing a significant role in driving up the price.
“The market’s extreme volatility suggests that speculators, who withdrew tens of billions of dollars from the commodities markets when Congress threatened to tighten oversight of excessive and harmful speculation, breathed a sigh of relief last week when action in the Senate seemed unlikely, and returned to the energy markets in full force,” said ATA President and CEO James C. May. “Well, speculators are back and prices are up.”
Although ATA recognizes the impact of the financial crisis on Wall Street, the weak dollar and the aftermath of Hurricane Ike, the unprecedented 16 percent jump over the weekend – from $104.55 per barrel last Friday to $120.92 per barrel today – also reflects the impact of excessive energy speculation.
May again called for a bipartisan approach to reining in excessive energy speculation, stating that Congress must pass a comprehensive energy plan or all Americans will pay the price as oil prices return to or exceed this summer’s record levels.