* Japan intervenes on yen, pushing dollar higher
* Fundamentals seen weak on struggling developed economy
* Euro zone, G20 meeting, surprise U.S. cold snap eyed
By Ikuko Kurahone
LONDON, Oct 31 Oil prices fell on Monday, with
Brent slipping below $109 a barrel, as the dollar rose against
the yen after Japan intervened in the markets to stem the rise
of its currency.
Investors and analysts said the oil market may be swayed by
a spate of economic events this week including a U.S. Federal
Reserve meeting on Wednesday, a European Central Bank press
conference on Thursday and a G20 meeting mid-week amid continued
concerns over the euro zone debt crisis.
Brent crude LCOc1 fell $1.29 to $108.68 a barrel by 1414
GMT after closing at $109.91 on Friday.
U.S. crude CLc1 fell $1.53 to $91.79 per barrel.
The dollar climbed to a three-month high against the yen
earlier on Monday after Japan's intervention. The U.S. dollar
index also rose against a basket of currencies.
A stronger dollar makes oil more expensive in other
"This morning, it is the Japanese intervention in the
foreign exchange market. On the macro front, it is a big week
this week," Olivier Jakob with Petromatrix said.
Jakob also said trading of the price spreads between U.S.
crude and Brent and of the forward curve was likely to continue
to influence the market this week.
In the middle of last week U.S. crude rallied on trading of
its spread with Brent, while Brent was held back as
backwardation of the curve flattened. Both got a brief boost
from a deal struck by the euro zone to recapitalise its banks
and strengthen its rescue fund.
But persistent doubts about the plan have put pressure on
the market, and the outright price of Brent crude ended Friday
little changed from the week before.
"Even if a massive financial crisis appears to have been
avoided, the economic outlook looks very weak for the next few
quarters," Christophe Barret, Global Oil Analyst with Credit
Agricole CIB said in a research note. "Oil demand should remain
lacklustre, on high prices and mediocre economic activity."
Consumer prices in the 17-nation euro area stayed at 3
percent in October, according to a first estimate by the
European Union's statistics office Eurostat, roughly in line
with a 2.9 percent forecast in the Reuters poll of economists.
Eurostat in a separate report said the jobless rate in the
euro zone rose slightly to 10.2 percent in September from a
revised 10.1 percent in August.
A reasonable price for crude was between $80 and $100 a
barrel, said Minister Mohammed bin Dhaen al-Hamli, the oil
minister of OPEC producer the United Arab Emirates, at an oil
conference in Singapore.
OPEC will meet in December to review its output policy amid
a faster-than-expected recovery in exports from war-torn Libya.
Richard Jones, deputy executive director of the
International Energy Agency (IEA), said the agency would not
want OPEC to cut its output target. The agency represents
developed nations, which are mostly net oil consumers.
Nobuo Tanaka, former executive director of the IEA, said an
oil price of $70 to $80 was just right but that prices of $100
or more would derail global economic growth, just as the record
prices preceding the 2008 financial crisis did.
Over the weekend, Spain and Portugal called for the United
States and other G20 powers to take action to help contain the
fallout from the European debt crisis at the G20 summit, set for
Cannes, France, on Nov. 3 and 4.
In the United States, mixed economic data did little to
support oil prices last week. The market will focus on jobs data
later this week to see any signs of economy improvement in the
world's largest economy.
The market was also eyeing weather in the U.S. Northeast,
which was hit with an early winter storm, leaving more than 3
million households without power on Sunday and killing at least
(Reporting by Rebekah Kebede in Perth and Ikuko Kurahone in
London; Editing by Anthony Barker)