After falling below $100 a barrel just a week earlier, light, sweet crude for October delivery jumped to $130 a barrel on the New York Mercantile Exchange Monday before falling back to settle at $120.92 for the day, up $16.37.
Crude prices are up about $30 per barrel in just four days as energy traders worried about the potential implications of the government's proposal to ease the financial crisis by absorbing billions of dollars in bad mortgage-related securities. The concern is that the government will have to dramatically increase its own borrowing, which could cause the value of the dollar to slide and increase inflation, causing another run on commodities as a safe-haven investment.
Meanwhile, the U.S. Energy Information Administration's weekly recap of average retail prices for on-highway diesel fuel showed the national average at $3.958 per gallon Monday. The highest prices were $4.11 in the New England region; the lowest, $3.924 on the Gulf Coast.