Oil prices mixed on Dubai debt woes

Oil prices mixed on Dubai debt woes

Updated at: 0259 PST, Saturday, November 28, 2009 NEW YORK: Oil prices closed mixed Friday on concerns that Dubai's call for a freeze on debt payment by a key state-owned company could derail the global recovery from recession. New York's main contract, light sweet crude for January delivery, settled at 76.05 dollars a barrel, a decline of 1.91 dollars from Wednesday's close. US markets were closed Thursday for the Thanksgiving Day holiday. In London, Brent North Sea crude for January delivery, which had lost 1.45 dollars Thursday, rose 19 cents to 77.18 dollars a barrel. In pre-market trading the New York benchmark contract had slid to 72.39 dollars, its lowest level since early October. "The market seems to have calmed down, but clearly not completely reversed," said Ellis Eckland, an independent analyst. "Oil is a leading risk asset, and was one of the first assets to be sold on these fears that the financial system might have some problems," he said. "The sole reason for the oil price dump can be summed up in one word: Dubai," said Tamas Varga, an analyst at PVM Oil Associates. "If the 2008 recession was started by banks overlending then the current debt problem in Dubai is a big warning sign that we're not out of the woods yet. "Banks running out of cash has a knock-on effect on every aspect of life, bringing share and commodity prices down and strengthening the dollar. This is exactly what is happening now," added Varga.