Oil up 16% in Monday's Trading

The price of oil jumped over $16 to $120.92 a barrel, the biggest one-day gain on record on Monday. There is uncertainty about how the government's financial bail-out plan will work, causing investors to switch to perceived safe havens such as oil.

Others believe that the US government's bail-out plan will help the economy, increasing demand for oil. Concerns also persist about supply as production in the Gulf of Mexico is still affected by Hurricane Ike.

At one point during trading, the price of oil rose by more than $25. The volatility in the price has been exacerbated by the fact that the contract for the supply of oil in October expires on Monday.

The contract for oil to be delivered in November was not up as sharply. It rose by $6.62 to $109.37 in New York. Last week oil traded as low as $91 a barrel. It had fallen from the peak of $147 a barrel it reached in July.