* Oil prices fall more than 5 pct from Wednesday settlement
* Dubai debt delay revives financial crisis fears
* Dollar jumps as investors trim risk exposure
(Updates prices, adds comments, previous PERTH)
By Chris Baldwin
LONDON, Nov 27 (Reuters) - Oil prices sank to a six-week low
below $73 a barrel on Friday as fears of debt default in Dubai
convulsed financial markets and the dollar rose as investors
moved into safer assets.
U.S. crude for January delivery <CLc1> was $73.70 a barrel
by 0906 GMT in electronic trading, down more than 5 percent from
Wednesday's settlement. There was no settlement price on
Thursday because U.S. markets were closed for Thanksgiving.
London Brent crude <LCOc1> fell $1.99 to $75.00.
European stocks also fell on Friday. The FTSEurofirst 3000
<> was down 1.4 percent in early trade, after falling
3.3. percent on Thursday. []
The euro was down more than 1 percent against the U.S.
currency as investors trimmed risk exposure. [] A stronger
dollar diminishes the appeal for some investors of oil and
commodities priced in the U.S. currency.
Dubai has asked for a debt standstill on tens of billions of
dollars as part of a restructuring, sparking debt default fears
that could hit other parts of the global economy and derail a
fledgling recovery from 2008's global financial crisis.
[]
"The Dubai situation is very worrying and people are
obviously worried about a potential domino effect if Dubai can't
pay off their debt," said Benson Wang, senior adviser at
Commodity Broking Services in Sydney.
"This episode has destroyed the confidence between borrowers
and lenders and it has also shaken the confidence about the pace
of a global economic recovery."
[]
The New York Mercantile Exchange will have a shortened floor
trading session on Friday.
Traders said Thursday's thin volumes and lack of a U.S.
crude settlement could also be exaggerating Friday's oil price
move.
"People are coming in to work, reading the papers, absorbing
the news from Dubai," said Tony Machacek, a broker at Bache
Commodities in London.
"We've seen such a substantial continuation move because the
funds are heavily long in commodities and the euro, and the drop
has triggered some technical liquidation. You really have to
gauge it on Brent."
Technical analysts pointed to support levels for London
Brent January futures, which closed on Thursday at $76.99, down
$1.45 from Wednesday.
"Forget yesterday's price action, it's all happening this
morning," technical analyst Clive Lambert at FuturesTechs wrote
in a note to investors, adding that Friday's moves could see
Brent head towards $65 a barrel.
Oil prices have so far fallen about 10 percent since
striking a year high of $82 early last month, as lacklustre
economic data and bulging fuel inventories in the United States
combine to dent hopes of a swift recovery in energy demand.
(Additional reporting by Fayen Wong in Perth, editing by Sue
Thomas)
((christopher.baldwin@reuters.com; +442075427526))
