Oil prices fell more than a dollar on Monday and approached a five-year low hit early this month after Morgan Stanley cut its price forecast for Brent crude, saying oversupply will likely peak next year with OPEC deciding not to cut output.
"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015," Morgan Stanley said in a report.
Brent crude for January delivery dropped to a low of $67.73 a barrel, near last week's trough of $67.53 which was its weakest since October 2009. It was down 78 cents at $68.29 at 0342 GMT (10:42 p.m. EST).
The price of Brent crude initially fell 6 cents after the release of Chinese monthly trade data that was well below expectations, with November exports rising only 4.7 percent annually while imports fell 6.7 percent.
But following the release of data showing that China's November crude oil imports rose 9 percent over October to 6.18 million barrels per day (bpd), the price of Brent gained 8 cents.
Morgan Stanley slashed its 2015 base-case forecast for Brent to $70 from $98 and for 2016 to $88 from $102. In its bear-case scenario, the bank sees the crude benchmark falling to a low of $43 in the second quarter of next year.
U.S. crude fell 77 cents to $65.07 a barrel, after hitting a session low of $64.63. West Texas Intermediate crude dropped to $63.72 last week, its lowest since July 2009.