By Carla Mozee, MarketWatch Eurozone inflation falls in November

LONDON (MarketWatch) -- European stocks fell Friday, with oil stocks sinking in a sea of red following a decision by the Organization of the Petroleum Exporting Countries not to cut its 30-million-barrel-a-day production target for oil.

The Stoxx Europe 600 oil and gas group was pushed 3.8% lower, and was on track for a more than 9% weekly loss. The group lost roughly the same amount on Thursday after OPEC held to its production target , disappointing those investors who had been hoping for the cartel to reduce output, in an effort to curb a recent drop in global oil prices.

Investors also assessed the impact of weak energy prices on eurozone inflation, which fell 0.3% in November, according to data released Friday by Eurostat.

The decline in inflation "just reiterates how serious a problem low inflation levels have become to the European Union economy," said Jameel Ahmad, chief market analyst at FXTM, in emailed comments. "Now that OPEC has decided against cutting oil production, this has led to even weaker commodity prices and it is anticipated that inflation levels might now decline even further in the short-term. This in itself is going to place further pressure on the ECB to move towards full-blown quantitative easing."

U.S. crude-oil futures on Friday (CLF5) dropped to a more than four-year low, losing more than 6% to trade just above $69 a barrel.

Markets: The Stoxx Europe 600 index fell 0.4% to 346.25, with oil stocks leading the pack as the worst performers. Premier Oil PLC shares were knocked down 12%, leading overall losses on the pan-European benchmark. Ophir Energy PLC dropped 7.9% as did Norwegian energy company Statoil ASA , and Subsea 7 S.A. , a Norwegian seabed-to-surface engineering contractor, fell 7.1%.

Among oil majors, shares of Total SA fell 3.2%, Royal Dutch Shell PLC was down 2.5% and BP PLC fell 2.3%.

But travel-related shares were among the best price performers as oil futures extended losses, considered a benefit to the oil-price sensitive sector. Air France-KLM SA climbed 6.3%, Deutsche Lufthansa AG rose 3.7% and TUI AG moved up 3.4%.

The Stoxx 600 was in line for a 2.9% rise for the month, and a 0.4% gain for the week.

Inflation: The weakness in energy prices showed up in the eurozone's November inflation reading. The headline number fell to 0.3%, down from 0.4% in October. Stripping out the effects from energy, food, alcohol and tobacco, core inflation reading stayed at 0.7%.

The data comes as investors watch the European Central Bank for signs it will launch full-blown quantitative easing, as the eurozone economy grapples with low inflation levels and lackluster economic growth. The ECB will meet next Thursday. Read: These 5 charts show how much Europe needs QE.

With expectations ramping up that ECB will launch sovereign-bond buying, yields on government bonds throughout the eurozone have been hitting all-time lows. The yield on Germany's 10-year bond fell to 0.697% on Friday, according to Tradeweb. At the same time, the yield on the 10-year French government bond dropped to 0.978%, after having dipped below 1% for the first time on Thursday. Yields decline as prices rise.

In other data news on Friday, the unemployment level for the eurozone remained at 11.5% in October. The euro (EURUSD) was trading at $1.2486, up from $1.2435 ahead of the release.

On the currency market, the Russian ruble (USDRUB) fell to new lows Friday following OPEC's production decision, as Russia takes in roughly 50% of its revenue from exporting oil and gas. The dollar was buying 49.305 rubles compared with 48.795 rubles late Thursday.

Elsewhere on the European radar, Switzerland will hold a vote Sunday on whether the country's central bank should more than double its holding of gold. The referendum aims to force the Swiss National Bank to hold a fifth of its assets in gold within five years and keep the bank from selling gold in the future.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires