Brent oil price trading lower on global stock market falls

ICE Brent crude oil price is trading lower on Friday around the $76 dollar mark as a heavy sell off overnight in Asia as nervous stock markets worried about banks’ exposure to Dubai World’s debt.

Futures for the Dow Jones Industrial Average were down 301 points, or nearly 3%, to 10,141. Futures for the S&P 500 were down 39.1 points, or 3.6%, to 1,069.50, while futures for the Nasdaq 100 were down 65 points, or 3.6%, to 1,729.25.

Dubai World, the city state’s largest corporate entity on Wednesday asked creditors for as six-month stay on debt repayments of $59 billion. European markets are also pointing to a second-day sell off with Eurostoxx futures down over 2%. Commodity prices also traded sharply lower, with oil futures down around 4 to 5%.

The NYMEX will have a shortened floor trading session on Friday. extended their decline from the previous day to fall below $76 a barrel on Friday, as nervous investors, roiled by debt problems in Dubai, pared their positions.

Data painting a gloomy economic outlook in Japan, the world’s third-largest energy consumer, put further stress on oil prices.

“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 advisor 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 Dubai-debt shockwaves dragged Asian stocks lower on Friday, shaking banking shares. The dollar index gained 0.4 per cent against a basket of currencies, and recovered slightly from a fresh 14-year low against the yen, prompting other commodities, including gold and grains, to fall.

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