Crude oil rose in New York after the United Arab Emirates' central bank said it ''stands behind'' the country's banks, easing concerns about a possible default by Dubai World.
Oil gained as much as 0.9 per cent after the Abu Dhabi-based UAE central bank said yesterday banks will be able to borrow using a special facility tied to their current accounts. The US dollar declined against the euro, bolstering the attraction of commodities as an alternative investment.
''The market is still coming to terms with the implications of the Dubai debt scare,'' said Toby Hassall, research analyst with CWA Global Markets Pty in Sydney. The move by the UAE central bank could be a ''positive sign,'' he said.
Crude oil for January delivery gained 62 cents, or 0.8 per cent, to $US76.67 a barrel in electronic trading on the New York Mercantile Exchange at 10:46 a.m. Sydney time. The contract declined $US1.91 to settle at $US76.05 on Nov. 27.
The US dollar traded at $US1.5007 per euro in Sydney, from $US1.4988 on Nov. 27. The US currency dropped 2.7 per cent last week against the yen, the biggest weekly decline since the period to Aug. 14, as stock markets slumped after state-owned Dubai World sought to delay payments on debt.
Brent crude oil for January settlement gained 48 cents, or 0.6 per cent, to $US77.66 a barrel on the London-based ICE Futures Europe exchange in Sydney. The contract rose 19 cents to end the session at $US77.18 on Nov. 27.
Bloomberg News
