Brent crude oil fell on Monday to a five-year low below $68 before recovering most of the losses as investors looked for a price floor after Opec's decision last week not to cut production.

US crude and Brent have fallen for five months in a row, oil's longest losing streak since the 2008 financial crisis.

"The market is still very much in panic mode," said Energy Aspects' chief oil analyst Amrita Sen. "Once we get over the panic, Brent prices will probably stabilise at around $65-80 a barrel in the short term."

Brent hit a low of $67.53 a barrel, the lowest since October 2009, and was down 7 cents at $70.07 a barrel by 1347 GMT. US crude was up 19 cents at $66.34 a barrel, having slipped to an intraday low of $63.72, the lowest since July 2009.

Saudi Arabia, the most influential member of the Organisation of the Petroleum Exporting Countries blocked moves by some smaller producers to curb oil output in response to huge oversupply in world markets.

Oil lost more than 12 per cent after Opec's decision last Thursday.

Data suggested the new price environment has hit fast-growing US shale oil production, the main driver of global production growth in recent years, with a 15 per cent drop in permits for new wells in November.

"The market is still looking for a new equilibrium below $70 (a barrel), which is a little surprising given that with the current prices much of the shale oil production in the US, or part of it, will be unprofitable," Commerzbank analyst Eugen Weinberg said.

With oil prices down about 40 per cent since June, the impact is being felt around the world as oil producers from Iraq to Nigeria revise 2015 budgets to reflect lower prices.

Slower-than-expected growth in China's manufacturing sector may add further downward pressure on oil. China's official Purchasing Managers' Index (PMI) slipped to 50.3 in November, a government study showed on Monday, lower than analyst forecasts of 50.6.

"In the fourth quarter, oil markets have lost the support of both the invisible hand of the US Fed and Opec," Petromatrix analyst Olivier Jakob said, referring to the Federal Reserve's move to phase out monetary stimulus for the US economy.-Reuters