European shares close lower on Dubai worries

LONDON Nov 30 (Reuters) - European shares fell to their lowest close in more than three weeks on Monday, with oil companies among the biggest fallers, as worries about Dubai's debt continued to unsettle global equity markets.

The FTSEurofirst 300 .FTEU3 index of top European shares provisionally ended 1.3 percent lower at 986.70 points, the lowest close since Nov 4.

The index rose 1 percent in November and is up nearly 53 percent from a lifetime low it hit on March 9.

Dubai's government said on Monday it was not responsible for the debts of its flagship conglomerate, offering little clarity on a plan to delay billions in debt repayments that has rattled world markets. [ID:nSP362937] Dubai's benchmark index closed 7.3 percent lower on Monday.

"We don't see this as a turning point. We're not down that far from the recent peak," said Teun Draaisma, equity strategist at Morgan Stanley, in London.

"The new theme is sovereign crises, rather than the banking crisis. But, perversely, these kind of risks mean that interest rates will stay low. No government in its right mind will start to tighten all of a sudden. We think the market will go higher."

Energy shares were among the biggest fallers, even as crude oil CLc1 futures staged a late recovery to trade above $76 a barrel after hitting a six-week low in the previous session.

BP (BP.L), Royal Dutch Shell (RDSa.L), BG Group (BG.L), Total (TOTF.PA) and StatoilHydro (STL.OL) fell between 1.6 and 2.8 percent. (Reporting by Brian Gorman) ((brian.gorman@thomsonreuters.com; +44 20 7542 9128; Reuters Messaging: brian.gorman.thomsonreuters.com@reuters.net))