Thu Nov 26, 2009 12:48pm EST
By Ikuko Kurahone
LONDON (Reuters) - Oil fell below $77 on Thursday in line with falls across financial markets and as weak demand for fuel offset potential support from a weak dollar.
Global stock markets fell after Dubai asked creditors of two of its flagship firms for a standstill on debt worth billions of dollars as part of restructuring Dubai World, the conglomerate that spearheaded the emirate's growth.
Oil traders said this was not directly affecting oil prices.
U.S. crude oil futures were $1.79 down at $76.17 a barrel by 1745 GMT. London Brent crude was down $1.42 at $77.02.
The dollar hit a 14-year low against the Japanese yen earlier but failed to push up oil prices, which succumbed to weak fundamentals with inventories swelling in the United States and Asia.
Markets slid, pressuring oil prices, in relatively thin trade ahead of the Thanksgiving holiday in the United States on Thursday, Christopher Bellew with Beche Commodities said.
"Everything is a bit weaker today. No chance of much fund buying with the U.S. on holiday," he said.
Gold eased from a record high hit earlier on Thursday as the dollar moved from its lows, although the currency's recovery may be temporary.
Oil has risen from below $33 in December, but weak demand has kept prices way below its record high of $147 hit in July last year.
Data and a survey from Asia showed oil fundamentals remained slack in many countries.
The head of the International Energy Agency (IEA) said signs of rising Chinese demand for oil may not be enough to offset weak demand in developed nations and trigger a price rally.
Oil refiners in Japan and South Korea continued to run at about 75-80 percent of capacity to curb fuel output to much sluggish demand.
The levels roughly match refinery runs in the United States, where oil inventories have remained much above a year earlier levels due to slack demand as the government data showed on Wednesday.
Singapore's oil product supplies also remained ample.
The New York Mercantile Exchange floor trading is closed on Thursday for the Thanksgiving Day holiday and will have an abbreviated session on Friday. But electronic trading will continue.
(Additional reporting by Jennifer Tan in Singapore; editing by James Jukwey)
© Thomson Reuters 2009 All rights reserved
Source: http://www.reuters.com/article/globalMarketsNews/idUSTRE56T3EA20091126
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