Crude oil futures tumble to six-week low on Dubai debt crisis

NEW YORK - Crude oil fell to the lowest level in six weeks Friday as Dubais attempt to reschedule its debt bolstered the dollar and prompted investors to sell commodities.
Oil dropped as much as 7.1 percent to nearly S75 a barrel as the U.S. currency climbed, dulling the appeal of raw materials as an alternative investment, and equities tumbled.
Dubai World, the government investment company burdened by $59 billion of liabilities, sought to delay repayments, raising concern that worsening defaults may hold back the global recovery.
Markets lost ground in Asia Friday with the Shanghai Composite index down 2.36 percent, the Nikkei 225 index in Japan off 3.22 percent and the Hang Seng index in Hong Kong fell 4.84 percent.
The price of light, sweet crude in New York lost $3.66 to $74.30 per barrel. Heating oil prices dropped 0.066 cents to $1.9241 per gallon. Reformulated gasoline prices lost 0.078 cents to $1.9196 per gallon. Natural gas prices lost 0.01 cents to $5.153 per million British thermal units.
At the pump, the national average price of unleaded gasoline was $2.632 per gallon Friday, down slightly from Thursday's $2.633, AAA said.
The situation in Dubai revives worries about the recovery of the economy, Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington, was quoted as saying in media reports. The strength of the recovery has an obvious and immediate impact on both oil demand and prices.
The U.S. currency traded at $1.4986 per euro, up 0.2 percentage point from $1.5019 yesterday. The dollar is down 6.8 percent this year.
A weak dollar can continue to hold us above $70, but a confirmed and sustained reversal of the dollar will open the door for a more substantial price retracement, said Tom Knight, vice president of trading and supply at Truman Arnold Cos. in Texarkana, Texas.