* Market relief that contagion appears limited so far
* Weaker dollar helps support
(Updates prices, adds details, quote)
By Edward McAllister
NEW YORK, Nov 30 (Reuters) - Oil prices rose more than $1
on Monday as the detainment of five Britons in Iran and a weak
dollar outweighed concerns over debt-laden Dubai and its impact
on the global economy.
U.S. light crude oil futures <CLc1> for January rose $1.23
to settle at $77.28. In London, Brent crude <LCOc1> gained
$1.29 to settle at $78.47.
Five Britons have been detained in Iran after their racing
yacht strayed into Iranian waters, British Foreign Secretary
David Milliband said on Monday, stoking fears of a possible
diplomatic dispute between the two countries. []
"It would certainly appear that the bulls are reacting to
the story about Iran detaining the British yacht crew," said
Stephen Schork, editor at the industry newsletter Schork Report
in Villanova, Pennsylvania.
Threats to oil supplies due to the tensions between the
West and Tehran have helped support crude prices in recent
years.
On Sunday several world leaders condemned Iran's
announcement that it planned to build 10 new uranium enrichment
plants in a major expansion of its atomic program.
Crude prices were pressured earlier on Monday as investors
eyed the debt crisis in Dubai and its effect on the wider
global economy.
Financial markets shuddered last week after Dubai said it
would ask creditors of state-owned Dubai World and Nakheel for
a standstill pact as a first step toward restructuring billions
of dollars of debt. []
But confirmation from Abu Dhabi that it would extend some
help to Dubai helped calm market concerns. []
[]
The dollar slipped against the euro on Monday as easing
concerns about Dubai's debt problems and an upbeat U.S.
regional business activity report diminished the greenback's
safe haven allure and provided support to crude.
A weak dollar makes dollar-denominated commodities like
crude less expensive for holders of other currencies and tends
to support prices.
U.S. stocks inched lower on Monday as investors worried
that the holiday shopping season might have gotten off to a
tepid start. []
Signs of a sluggish recovery in oil demand and high fuel
stockpiles in the United States have kept a lid on crude
prices, which have risen just 28 cents since Oct 30.
Oil is up more than 70 percent this year as investors look
to signs of a recovering world economy and a potential rebound
in fuel demand.
Sentiment is on edge, and analysts said there could be
another round of corrections in equities and commodities
markets if Dubai is not able to resolve its debt problems.
"There is still uncertainty on how the Dubai situation will
play out," said Phil Flynn, analyst at PFGBest Research in
Chicago.
Implied volatility in U.S. crude futures <CLATMIV>, a
measure of risk perception based on options, rose 15 percent on
Friday, the steepest jump since October 2008.
(Additional reporting by Robert Gibbons and Gene Ramos in New
York and Christopher Johnson in London; editing by Jim
Marshall)
((Edward.mcallister@thomsonreuters.com; +1 646 223 6221;
Reuters Messaging:edward.mcallister.reuters.com@reuters.net))
