That's David Gaffen's line at MarketBeat:
...It isn’t so much the rise in oil that has people frightened; it’s the rapid, volatile nature of this surge. Oil closed at $133.17 a barrel today, gaining more than $4 in trading, and has added 7% in a four-day span. Investors wrapped the rising price of crude, falling inventories, and the bad news from AMR Corp. (which fell 24%) into a festering stew of glop that easily justified unloading holdings.
“It may not be the price itself — is $133 substantively different from $128? — but that it can move that quickly, by that much is almost by definition the meaning of uncertainty,” says Stephen Wood, senior portfolio strategist at Russell Investments. “If you’re an airline or business how do you plan for those costs? From an input or commodity perspective it creates uncertainty, and in the face of uncertainty investors tend to panic and move out.”
Way back, investors scoffed at various forecasters who suggested oil would hit $100 a barrel; now $200-a-barrel oil is not considered all that silly an idea. But at this point, very little would surprise anyone, even if the crude contract somehow became self-aware and opened the oil market itself....