* Dollar slips after UAE central bank moves to help Dubai
* Market relief that contagion appears limited so far
(Updates with prices, detail)
By Christopher Johnson
LONDON, Nov 30 (Reuters) - Oil prices recovered a little on
Monday, rising above $76 a barrel as the dollar weakened, but
investors kept a wary eye on debt-laden Dubai and its impact on
the global economy.
Signs of a sluggish recovery in oil demand and high fuel
stockpiles in the United States have kept a lid on crude prices,
which are set for a fall of around 0.5 percent this month, their
first decline since July.
But hopes that the debt crisis in Dubai might be contained
encouraged something of a relief rally on Monday.
"The Dubai situation should not have a big impact on the oil
market," said David Wech, analyst at JBC Energy in Vienna.
U.S. light crude oil futures <CLc1> for January were up 5
cents at $76.10 a barrel by 1135 GMT. London Brent crude <LCOc1>
gained 7 cents to $77.25.
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 towards restructuring billions of dollars of debt.
[]
But confirmation from Abu Dhabi that it would extend some
help to Dubai, as well as moves by the United Arab Emirates to
offer emergency assistance to banks in Dubai, helped calm some
market concerns. [] [] []
SENTIMENT
Asian stocks made a tentative recovery after last week's
steep sell-off, although European shares fell in early trade,
depressed by banks. [] []
The dollar edged down against other major currencies on
Monday, with the dollar index <.DXY> falling 0.5 percent against
a basket of currencies. []
The dollar and developments in Dubai will be key factors in
driving the direction of oil prices this week, analysts said.
Oil is up more than 70 percent this year, but is still
roughly half its July 2008 high of more than $147 a barrel.
Sentiment is on edge and analysts said there could be
another round of corrections in equities and commodities markets
if Dubai were not able to resolve its debt problems.
Eugen Weinberg, analyst at Commerzbank, said the oil market
response to Dubai's troubles could be a pointer to underlying
sentiment. If oil prices fell, they could slip a lot further,
possibly even to below $70 per barrel.
"It's an important day, especially for oil, but also for
metals. We could see buying in the dips and should the markets
move higher, sentiment could improve," Weinberg said.
Implied volatility on U.S. crude futures <CLATMIV>, a
measure of risk perception based on options, rose 15 percent on
Friday, the steepest jump since October 2008.
In Europe, where the European Central Bank meets this week
amid expectations it will announce plans to exit its super-loose
monetary policy, implied stock market volatility has soared.
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. []
(Editing by Sue Thomas)
((christopher.johnson@thomsonreuters.com; +44 207 542 6056;
Reuters Messaging: christopher.johnson.reuters.com@reuters.net))
