This morning shares appear to be down this morning over confusion of the Abu Dhabi bailout.

Five days ago, the Gulf state of Dubai initiated a panic around the world.  It was news that the state owned company Dubai World wanted a 6 month break from its debt repayments.  This raised the spectre of a meltdown in the luxury land of the rich, possibly leading to a panic that derailed the global econmic recovery.

Trading has been suspended since last week for the Eid al-Adha holiday.

A good sign that the world markets are feeling more optimistic is that the US dollar has lost ground against many other currencies, which has helped push the oil price up.  Despite the state of the US economy, investors still seek the safety of the greenback at times of crisis.

The Japanese prime minister Yukio Hatoyama has been talking about the situation also.  He has been talking to reporters in Tokyo that he “remains cautious over Dubai credit worries”.

Royal Bank of Scotland shares are down over 4% this morning at 33p, this has helped push the FTSE 100 down by 40 points to 5204.  It was annouced on Friday that RBS has organised more loans to Dubai World than any other bank.  Its still not clear how much of that debt remains on RBS’s books.  This will no doubt cause a worry for RBS investors this morning as has been relfected in their share price.

Europes 2nd biggest oil company BP Plc has said their profit fell 53% on lower energy prices.  They have said that there is “little evidence” of a recovery.

Their 2nd quarter net income has fallen to $4.39 billion, or 23.16cents a share, from $9.36 billion, or 49.23cents, in the earlier period.

CEO Tony Hayward of BP said that estimated cost cuts would exceed an earlier target as it increased production to more that 4,000,000 barrels a day.   There has been “significant falls” in the first half and the recovery will be “long and drawn out” as the demand stabilizes said Tony.

An analyst from Panmure Gordon and Co recently said in an interview “I have serious concerns about the operating environment and that the oil price may come under pressure.”

Later this week BP’s rivals will be releasing their results which are Spains Repsol YPF, Total SA of France, Royal Dutch Shell PLC.

U.S oil futures averaged $59.79 a barrel in the 2nd quarter, 52% lower than a year earlier, while gas futures slumped 67%.  NY oil futures have rebounded 53% since the beginning of 2009 and traded at $68.44 today.