SINGAPORE (Nov 17): Brent crude fell to $79 a barrel on Monday following news Japan, the world's fourth-biggest crude importer, had slipped into recession and after comments from the West's energy watchdog that a return to high oil prices was unlikely soon.
The chances of a pick-up in global oil demand were dealt a blow by the data showing Japan's economy unexpectedly shrank by an annualised 1.6 percent in the third quarter because of weak consumption and exports.
"This is another knock on crude oil prices, another bearish factor," said Tony Nunan, oil risk manager at Tokyo's Mitsubishi Corp.
Brent crude fell 41 cents to $79.00 a barrel. The contract for January delivery closed $1.92 higher on Friday.
U.S. crude for December delivery was 34 cents lower at $75.48 a barrel, after settling $1.61 higher.
All eyes remain on possible production cuts by the Organization of the Petroleum Exporting Countries, when the oil cartel meets next week.
"The downtrend is still alive until we get something that turns us around. That could be the OPEC meeting," Nunan said.
Iran's oil minister accused some OPEC countries on Sunday of making up excuses to justify their refusal to stabilise prices by cutting output, a possible reference to Saudi Arabia after a Saudi official insisted the issue should be left to market forces.
A NEW ERA IN OIL MARKETS
In another bearish sign for oil prices, the West's energy watchdog said the oil market had entered a new era with lower Chinese economic growth and booming U.S. shale output, making a quick return to high prices unlikely.
The International Energy Agency said in its monthly report that prices could fall further in 2015 after dropping below $80 a barrel for the first time since 2010.
Investors were also watching for signs of falling oil prices affecting output from tight oil projects in the United States. Production in North Dakota, the second-biggest producing state after Texas, rose more than 50,000 barrels per day to an all-time high of 1.18 million bpd in September, according to the state regulator.
A strengthening dollar has contributed to the recent fall in oil prices, which are denominated in the U.S. currency. The greenback touched a four-year high against a basket of currencies on Friday, but slipped 0.3 percent on Monday.