WTI settles above $75, paring earlier losses

Lucy Nicholson | Reuters

Contracts for U.S. crude settled down 16 cents at $75.66 on Monday, paring earlier losses in afternoon trade as Russia and Venezuela signaled that closer coordination on oil prices could be coming ahead of a meeting of OPEC members.

Oil prices fell earlier on Monday as fourth-largest crude importer Japan fell into recession, taking the wind out of Friday's rally.

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. Anemic stock markets on Wall Street did not help.

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Benchmark Brent crude front-month contract was down 27 cents to $79.14 a barrel shortly before 3:00 p.m. EDT, after falling $1.47 earlier to a session low at $77.94.

U.S. crude traded at a session low of $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.

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Venezuela's Foreign Minister Rafael Ramirez said the OPEC will increase coordination in the face of the fall in oil prices, the South American government said in a statement on Monday, without elaborating.

"We will be united in terms of putting forth a common policy," said Ramirez, who until September was both oil minister and head of state oil company PDVSA.

Ramirez has been on a global tour of OPEC and non-OPEC nations to shore up support for an output cut.

Also on Monday, top Russian oil producer Rosneft announced its chief executive, Igor Sechin, will fly to Vienna on Nov. 25, just two days before the OPEC meeting to debate the plunge in oil prices.

The surprise announcement from the state-backed firm raised speculation that Sechin, a close ally of President Vladimir Putin, will discuss coordinating with OPEC.

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.

CNBC contributed to this report.