Retreating more than $1 on the New York Mercantile Exchange, crude oil came under pressure Friday as a firmer dollar sent equity markets sliding, which pushed the energy commodity back into negative territory.
Because oil prices have been tied to broader financial markets for some time, a lift in the greenback's value against a basket of currencies ultimately drives the price per barrel of crude lower. As commodities become more expensive to purchase, investors seek safe haven in the U.S. currency.
Additionally, the market’s negative sentiments surrounding the stability of recovering financial markets were stirred by news of a potential default at a Dubai state-owned conglomerate, Reuters reported Friday.
Ahead of the Thanksgiving holiday, Dubai announced that two of its flagship firms would delay repayment on debt as part of its efforts to restructure the Dubai World conglomerate, Reuters said.
Exiting the Thanksgiving holiday, the price of light, sweet crude oil for January delivery settled $1.91 lower than Wednesday’s close at $76.05 a barrel, although still comfortable in its current trading range above a recent $75 low and just under an $80-threshold.
Conversely, natural gas futures for December delivery closed once more above the highest level of its contract trading range at $5.192 per thousand cubic feet, potentially making headway towards further gains on the NYMEX next week as the winter heating season draws closer.
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