* Brent Crude off 4 year low, but set for 15 pct Nov drop
* FTSEurofirst falls, led lower by oil and gas stocks
* Euro zone data show inflation weak, Bund yield pressured
* Dollar gains against commodity currencies, euro and yen
(Updates U.S. futures, prices)
By Alistair Smout
LONDON, Nov 28 Brent crude fell to a fresh
four-year low on Friday, sending oil-related shares and
currencies lower, after OPEC decided against cutting output
despite a supply glut.
With markets in the United States due to reopen following
Thursday's holiday, futures on major U.S. stock indexes
were around 0.2 percent lower.
Brent crude touched a low of $71.12 a barrel after
settling at a four-year closing low on Thursday, when Saudi
Arabia blocked calls from poorer members of the OPEC oil cartel
to cut production to stem a slide in global prices.
Europe's oil benchmark came off its lows to trade at $73.09,
but remained on track to have lost more than 15 percent in
November -- its biggest monthly fall for six years. U.S. crude
was last down 6.5 percent at $68.90.
The slump dominated Asian and European trade.
European oil and gas stocks dropped 3.7 percent,
dragging the pan-European FTSEurofirst 300 0.4 percent
lower to 1,387.12 after a five-day winning streak.
The euro and the yen both lost ground to the
safe-haven dollar, which also made sharp gains against the
currencies of oil-rich countries, rallying to as much as 7
Norwegian crowns, a high not seen in over five years.
Although a lower oil price helps support economic growth, it
may undermine efforts to avert deflation in Japan and Europe.
"Whatever positive connotations lower energy (prices) might
have for global growth, the extent and pace of the decline in
oil seems the more worrying factor for the moment," said Michael
Turner, a strategist with RBC Capital Markets.
The plunge in oil prices weighed on inflation expectations,
pinning euro zone sovereign bond yields at record lows after
data showed cheaper energy helped push annual inflation in the
bloc back to a five-year low of 0.3 percent in
The reading was in line with expectations, and did nothing
to counteract soft price data from Germany and Spain that
suggested the European Central Bank (ECB) may come under more
pressure to ramp up monetary stimulus to counter the threat of
German 10-year yields, the benchmark for euro
zone borrowing, were down a fraction at 0.70 percent, while
French peers were 2 bp lower at 0.98 percent.
Bonds from Italy and Spain, which trade at a large premium
to Bunds and offer the greatest amount of potential for
tightening if the ECB launches a full-blown quantitative easing
(QE) programme, saw bigger moves.
"It's pretty clear that the vast majority of the
disinflation trend has been due to oil prices ... but it is also
clear that this is not a development the ECB can ignore," said
Credit Agricole's senior euro zone economist Frederik Ducrozet.
The ECB is expected by many to follow Japan in buying
government debt to try to vanquish deflation. On Friday,
Japanese two-year government bonds traded at a negative yield
for the first time in history, as the Bank of
Japan's massive bond buying crushed short-term debt yields.
The dollar rose about 0.4 percent against the yen to 118.17
yen, while the euro held broadly steady at $1.249.
The dollar also spiked to a one-week high against its Canadian
counterpart at C$1.1392 and rose 0.6 percent against a
basket of six major currencies.
Spot gold extended losses into a third session on
expectations that plunging oil prices could sap inflationary
pressure and curb the metal's appeal as a hedge. Gold was down
0.6 percent at $1,183.90 an ounce, over 1 percent lower on the
week and ready to snap a three-week rally.
(Additional reporting by Patrick Graham and John Geddie in
London and Blaise Robinson in Paris; Editing by Catherine Evans
and Mark Potter)