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New York - Brent crude fell below $100 a barrel on Monday, the first time in nearly 15 months, before returning to close in three-digit territory but down on the day as fear of Opec output cuts helped the market recover from weak Chinese and US data.
Slower-than-expected growth in the world's top oil consumers, and ample supply, has pushed prices down from a high for the year above $115 in June, complicating central banks' efforts to ward off deflation.
Still, analysts do not think it will be easy to keep Brent, the world's benchmark for oil, at below $100 as the oil-exporting countries within Opec were likely to retaliate with production cuts to push the market up.
"Obviously, a breach below $100 raises a host of issues if you're an Opec cartel member, and I think that's one of the things the trade took cognizance of as the market went down today," said Phil Flynn, analyst at Price Futures Group in Chicago.
"A lot of these Opec countries basically plan their entire universe with the fact that Brent crude will never fall below $100."
Saudi Arabia and other Opec members have previously said they prefer oil at above $100.
"The fall in prices is a temporary thing. They are still within the acceptable range," an Opec delegate from a Gulf country said. "We are now approaching winter so the prices are expected to rise," said the delegate, who declined to be identified.
Brent settled down 62 cents at $100.20, after earlier slumping to $99.36, the lowest since May 1 2013.
US crude finished down 63c at $92.66 a barrel. It settled at $93.29 on Friday for its sixth weekly drop in seven weeks after disappointing US nonfarm payrolls data cast doubt on the pace of growth in the world's biggest oil-consuming economy.
Monday's declines followed data showing that China's import growth fell unexpectedly for the second consecutive month in August, posting its worst performance in over a year as domestic demand faltered.
It raised concerns that tepid domestic demand exacerbated by a cooling housing market is increasingly weighing on China.
The European Central Bank last week cut interest rates to a record low as eurozone inflation edged towards zero, while the Bank of Japan is maintaining a massive monetary stimulus as it tries to break free from years of deflation. Lower oil prices add to the downward pressure on inflation from anaemic growth.
Investors kept a close eye on geopolitical concerns in Europe and the Middle East, especially on the impact tensions could have on European demand. So far, fighting in Iraq has had little impact on oil production, and output from Libya has increased over the last three months despite violence there.
A ceasefire in Ukraine was largely holding, despite sporadic violations.
