The euro rebounded after ECB President Jean-Claude Trichet said the bank may raise rates next month. Investors looking to hedge against the dollar's falling value have helped lead oil, gold and corn to records this year.
Crude oil for July delivery rose $5.49, or 4.5 percent, to settle at $127.79 a barrel at 2:47 p.m. on the New York Mercantile Exchange, the highest since May 28. It was the biggest one-day gain since March 26. Futures reached a record $135.09 a barrel on May 22 and are up 95 percent from a year earlier.
Prices rose as much as $6.08 a barrel in after-hours electronic trading. Floor trading in New York ends at 2:30 p.m. and electronic trading ceases at 5:15 p.m.
Brent crude oil for July settlement rose $5.44, or 4.5 percent, to settle at $127.54 a barrel on London's ICE Futures Europe exchange. It was the biggest single-day gain since Dec. 12. Prices reached a record $135.14 on May 22.
ECB policy makers have not followed the Federal Reserve and the Bank of England in cutting interest rates. Oil rose 52 percent since Sept. 18 when the Fed began curbing rates to bolster an economy already reeling from a credit crisis. The Euro advanced 11 percent against the dollar in the period.
Continental Airlines Inc. will cut 3,000 jobs and shrink its jet fleet by 18 percent, becoming the fourth major U.S. carrier to slash payrolls and flights as soaring fuel prices push the industry to its worst losses since Sept. 11. United Airlines, the second-largest U.S. carrier, said yesterday it was shutting its low-fare Ted brand and retiring 70 planes.