Crude slips below $75/ bbl on concerns of Dubai World

Crude oil futures fell below USD 75 per barrel on concerns about the global economic recovery and oil demand. The concerns were sparked by the debt crisis in Dubai.

The sentiments were hurt by Dubai's government statement announcing the restructuring of the Dubai World conglomerate.

The Emirate said on Wednesday that it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel, builder of its palm-shaped islands, to agree a standstill on billions of dollars of debt as a first step towards restructuring. Dubai World has USD 59 billion of liabilities, representing a large part of Dubai's total debt of USD 80 billion.

The Dubai government's announcement prompted Standard & Poor's and Moody's Investors Service to sharply cut their ratings on several government-related entities. Moody's slashed some units to junk status and S&P said the restructuring could be considered a default.