Crude oil
On Friday, crude oil futures dropped in price on the back of the fears concerning economic effects of Dubai World problems and under the influence of the US dollar strengthening.
According to the trading results, the January sweet crude oil futures decreased by 1.91 USD or by 2.5% to 76.05 USD per barrel. Brent on ICE Futures ticked up by 19 cents or by 0.6% to 77.18 USD per barrel.
On Wednesday evening, Dubai World the largest corporation of the United Arab Emirates asked for six-month delay in payment that brought concerns to the market.
It instigated the significant losses at the world stock and commodities markets including crude oil and gold markets, while the US dollar rose, as investors were hasty to shrink the volume of risky assets that they had and bought more safe assets. Crude oil also has the tendency to move down amid the American dollar growth, which make it more expensive for other currencies keepers.
Fears regarding Dubai World debt increased concern about the world economy condition. Many crude oil market participants bet to that the world economy recovery will advance the oil demand, that is why any news, which break this confidence, can reflect negatively the prices.
However, the oil prices bounced back the most part of sustained losses at the beginning of the day. After the US dollar declined against the euro, when the fears about Dubai World came down. The European banks and governments signaled all over the world that their vulnerability in the face of Dubai World problem is not as essential as it was predicted.
Gold
Gold futures closed with abasement on Friday as traders closed gold positions because of the American dollar strengthening and the world stock indices decline. At the same time, during the North American session on Friday gold prices bounced back the most part of lost positions as the US dollar went down from the high levels and investors wanted to buy gold by favorable prices. The February gold futures ticked down by 13.10 USD to 1175.50 USD per ounce at the trading results.
Regards,
analyst: Vladimir Donin.
