Brent oil price higher in early trading on Monday

Brent crude oil price gained 46 cents to $77.64 on the ICE Futures exchange in early trading on Monday after the United Arab Emirates central bank said it would back the Dubai’s lenders from a possible default by Dubai World, easing concerns of an economic slowdown.

Oil prices gained as much as 1.1 percent today after the Abu Dhabi based UAE central bank said yesterday financial institutions will be able to borrow using a facility. The US dollar declined against the euro, bolstering the attraction of commodities including oil and gold as an alternative investment.

“There is the expectation that Abu Dhabi will step in and do what needs to be done,” said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy in Singapore. “Even so, the amount of capital isn’t really enough to upset the economic resurgence we’ve seen, so it’s really just a chance to buy on the dip.”

Crude oil for January delivery climbed as much as 80 cents to $76.85 a barrel on the New York Mercantile Exchange. Prices were at $76.63 a barrel, up 58 cents, at 3:26 p.m. in Singapore.

The contract declined 2.5 percent to settle at $76.05 a barrel on Nov. 27. Prices have gained 72 percent this year. Oil is set for a monthly decline of 0.4 percent, its first drop in four months.

“The market has run out of steam after spending most the year in an upward trajectory,” said Toby Hassall, a research analyst with CWA Global Markets Pty in Sydney. “The market is still coming to terms with the implications of the Dubai debt scare for oil.” The move by the UAE central bank could be a positive sign, he said.

Tags:  brent oil price, Dubai, ICE, UAE