Oil Down after One-Day Rise, as Japan Enters Recession
NEW YORK, Nov 17 (Reuters) - Oil prices fell on Monday after a one-day rally as fourth-largest crude importer Japan fell into recession and an OPEC meeting neared without an agreement to cut production.
The dollar's strength against the yen, euro and other major currencies also weighed on prices of oil and other commodities denominated in the greenback. Anaemic stock markets on Wall Street did not help.
Benchmark Brent crude's front-month contract was down 80 cents to $78.61 a barrel by 12:10 p.m. EST (1710 GMT), after falling $1.47 earlier to a session low at $77.94.
Front-month U.S. crude traded 66 cents down to $75.16 a barrel, after a session bottom at $74.71.
"Arguably, the Japanese recession is pulling everything down, crude included. But the oil market has another and bigger problem: that the OPEC meeting will come and go without any change in production," said Andrew Lipow, president of Lipow Oil Associates in Houston.
Japan's economy unexpectedly shrank by an annualized 1.6 percent in the third quarter due to weak consumption and exports that pushed it into recession and raised fresh concerns about global growth.
On the supply front in crude, traders are awaiting clearer signs that a Nov. 27 meeting of Organization of the Petroleum Exporting Countries will act to reduce a widely-perceived glut caused partly by prolific shale oil production.
The finance minister of Saudi Arabia reinforced speculation on Monday that OPEC's largest oil exporter will not be cutting supplies when he said the plunge in oil prices would have no direct impact on the kingdom's budget or government spending next year. Ibrahim Alassaf also said at the weekend that oil prices should be left to market forces.
Iran's oil minister, meanwhile, accused some in OPEC of making up excuses not to cut production.
Brent prices have fallen about 30 percent from a June high above $115, on oversupply concerns. On Friday, the market jumped almost $2 a barrel for its biggest gain in three weeks as support emerged after prices hit four-year lows under $80.
"We are fast and furiously giving away most of the gains we had on Friday," said Ole Hansen, senior commodity strategist at Saxo Bank.
(Additional reporting by Claire Milhench in London and Jacob Gronholt-Pedersen in Singapore; Editing by Michael Urquhart and Chris Reese)
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