Oil creates further travel volatility
Tuesday, 23 Sep 2008 10:20
The price of oil in the world economy has recorded its largest ever one day gain - up by more than $16 to $120.92 a barrel yesterday.
It is now feared the increase in prices will place further pressure on already struggling airlines and tour operators.
A number of airlines have already gone bust this year.
Premium cross-Atlantic services were first hit – with MAXjet, Eos and Silverjet all falling – followed by low cost airline Zoom.
However, perhaps the biggest collapse to date was that of XL, which left nearly 100,000 travellers stranded abroad earlier this month.
Continued uncertainty over how the American government's financial bail-out plan will work is causing investors to switch away from the financial sector to perceived safe havens such as oil.
Gold has also recorded gains in recent days.
This is despite hitting a seven-month low last week.
On September 15th, the price of a barrel of US light sweet crude shed $5.47 to sit at $95.71 in New York.
Similarly, London Brent also fell sharply, down $5.20 to $92.38 a barrel last week.
This situation, however, now appears to be in reverse.
Chris O'Toole