* Abu Dhabi to aid Dubai on "case by case" basis
* Dollar edges down after UAE central bank moves (Updates
prices)
By Fayen Wong
PERTH, Nov 30 (Reuters) - Oil prices rebounded toward $77 a
barrel on Monday, aided by a weaker U.S. dollar, but investors
continued to eye developments in debt-laden Dubai with caution
over their impact on the pace of the global economic recovery.
Concerns about a sluggish recovery in global fuel demand,
along with high fuel stockpiles in the United States, have
pressured crude prices, which are set for a fall of about 0.7
percent this month, their first decline in four months.
"The Dubai debt scare situation has eased slightly and the
U.S. dollar has weakened, so we're now seeing more investors
flood back into the market and that's driving prices up," said
Ben Westmore, a commodities analyst at National Australia Bank.
"But the rebound will be limited because there's still a
lot of uncertainty around the Dubai issues and people are still
trying to digest what it could mean to the world economic
recovery."
U.S. crude for January delivery <CLc1> rose 61 cents to
$76.66 a barrel by 0337 GMT, retracing some of Friday's $1.91
losses.
London Brent crude <LCOc1> gained 42 cents to $77.60.
Prices are up 72 percent so far this year, but are still
roughly half their July 2008 high of more than $147 a barrel.
Financial markets shuddered last week after Dubai said it
would ask creditors of state-owned Dubai World and Nakheel, the
builder of its palm-shaped islands, for a standstill pact as a
first step toward restructuring billions of dollars of debt.
[].
But confirmation from Abu Dhabi, the wealthy capital of the
United Arab Emirates, that it would extend some help to Dubai
helped calm some market concerns. []
Moves by the United Arab Emirates to offer emergency
assistance to banks in Dubai also soothed market fears about a
looming debt default. []
Asian stocks made a tentative recovery after last week's
steep sell-off over the Dubai debt crisis as investors' nerves
steadied on hopes the fallout of a potential default would be
limited. []
U.S. dollar movements and developments in Dubai, will be
key factors in driving the direction of oil prices this week,
analysts said.
The greenback edged down against other major currencies on
Monday, with the dollar index <.DXY> falling 0.52 percent
against a basket of currencies.
Despite Monday's rally, analysts cautioned that sentiment
remains on edge and there could be another round of correction
in the equities and commodities markets if Dubai was not able
to resolve its debt woes.
"Indeed, oil prices could be at the mercy of the renewed
financial pessimism till further clarity on the Dubai situation
emerges," Barclays Capital said in a research note on Friday.
"While short forays below the recent trading range cannot
be ruled out as a result of the renewed pessimism, we do not
see any underlying shift in the oil market fundamentals and
thus expect a return to normalcy once initial fears abate," it
said, adding that it saw $70 as the minimum support level.
Separately, Iran announced plans on Sunday to build 10 new
uranium enrichment plants in a major expansion of its atomic
programme, just two days after the U.N. nuclear watchdog
rebuked it for carrying out such work in secret.
[]
Analysts said traders were unlikely to place too much
premium on supply risks at the moment as the market remained
well supplied and overall demand outlook was still bearish.
(Editing by Clarence Fernandez)
((fayen.wong@thomsonreuters.com; +618 9456 1947; Reuters
Messaging: fayen.wong.reuters.com@reuters.net))
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