In response to the government's planned bail-out of the American financial sector, oil prices posted a 16 percent gain Monday, September 22 to $120 a barrel, the largest one-day gain on record, after falling to $90 a barrel last week.

The price of U.S. crude for October delivery gained $16.37 to close at $120.92. The contract for November delivery gained $6.62 to close at $109.37.

Amanda Kurzendoerfer, a commodities analyst at Summit Energy in Louisville, KY, in describing the situation, was quoted by Automotive News saying, "The market went crazy here and it looks like the weakness of the dollar was a fuel for the sharp price increases. NYMEX October crude was also expiring and that provoked short covering.

The government's planned rescue of the financial system appears to have boosted confidence in the U.S. energy markets battered by high gasoline prices, changing consumer habits, and the slow recovery of oil production in the Gulf of Mexico in the wake of Hurricane Ike.

Approximately 25 percent of the U.S. oil production is located in the Gulf where 80 percent of the drilling facilities and seven refineries remain closed two weeks after the Category 3 hurricane hit the Texas coast between Galveston and Houston.