Crude Oil Tumbles on Dubai Woes

NEW YORK (TheStreet) -- Crude oil futures tumbled nearly 5% Friday morning, as fears over Dubai's debt roiled U.S. commodities markets.

Global investors began scurrying to safety after Dubai said late Wednesday that a state-controlled investment entity requested a six-month abeyance on repayments for $60 billion in debt. U.S. investors returned to a shaky, abbreviated Friday trading session following Thursday's Thanksgiving holiday.

The January delivery contract for crude oil plunged below $73 earlier, as news from the emirate undercut recent optimism about economic recovery. Crude oil futures recently slipped $3.70 to $74.26 a barrel.

The pullback in crude oil futures also were weighed by geopolitical concerns in the Middle East, where a standoff between the International Atomic Energy Agency and Iran intensified. The governing body of the IAEA voted to censure Iran on Friday for building a secret uranium enrichment site.

Energy equities fell, in turn, after the opening bell, as most major integrated operations laid mired in red. Dow Jones Industrial Average components Exxon Mobil(XOM Quote) and Chevron(CVX Quote) slid 1.9% and 2.3%, respectively.

Servicers also slumped, as the Philadelphia Oil Service Sector Index dropped 3.6%. Halliburton(HAL Quote), BJ Services(BJS Quote) and Baker Hughes(BHI Quote) shed 4.1%, 3.5% and 3.8%, respectively.

The dollar, too, strengthened against a basket of currencies, with the Dollar Index recently higher by 0.7%.

Elsewhere on the NYMEX, the January delivery contract for heating oil lost 8 cents to about $1.96 a gallon. Natural gas futures for January delivery declined by 17 cents to $4.99. The January delivery contract for gasoline also fell 9 cents to $1.93 a gallon.

-- Written by Sung Moss in New York