Oil falls anew as OPEC emergency meet, output cut ruled out

By Barani Krishnan

NEW YORK (Reuters) - Crude prices came under renewed selling pressure Monday after OPEC said it would not cut oil output despite fears of a glut, and a UAE official opposed holding an emergency meeting of the producer group to fix prices.

Benchmark Brent oil fell to nearly $60 a barrel while U.S. crude appeared to have $55 as its next major test, extending last week's rout that wiped out about $8, or more than 10 percent, off both markets.

"You have all these OPEC officials reiterating they are not going to cut production, so you are seeing selling into the rallies," said Phil Flynn, analyst at Price Futures Group in Chicago.

Abdullah al-Badri, secretary-general of the Organization of the Petroleum Exporting Countries, said the group could ride out an oil price slump since June of nearly 50 percent without amending production. Influenced by top exporter Saudi Arabia, OPEC decided last month that cutting output meant losing its market share.

Suhail Bin Mohammed al-Mazroui, oil minister of the United Arab Emirates, later said there was no need for an emergency OPEC meeting to help support prices.

Venezuela and Algeria, which need higher oil prices for their economies, were among OPEC members that had hinted at an emergency meeting after last month's Vienna summit that did not agree on output cuts. OPEC's next meeting is in June 2015.

Oil was up initially early on Monday on news that Libya's two biggest oil ports had shut due to fighting between armed factions allied to the country's two rival governments.

Loading delays for January cargoes of North Sea Forties crude due to lower-than-expected output had also supported the market. The North Sea Forties sets prices for Brent.

The Buzzard oilfield in the UK North Sea, the largest contributor to the Forties crude stream, has had a new production glitch, a trade source said on Monday.

An hour ahead of the close, U.S. crude was down $1.45 at $56.36 a barrel. It had plumbed a new May 2009 low of $55.87 after rallying earlier to $58.37.

Brent was down 65 cents at $61.20. It had risen as much as $1.40 earlier to $63.25 after a session low at $60.28, a bottom since July 2009.

The disparity in their drop extended Brent's premium versus U.S. crude to a near one month-high of almost $5.

Traders said Brent's losses were capped by the North Sea Forties and Libyan situations. The spread between its front-month January and nearby February also narrowed, to 16 cents a barrel from Friday's 30 cents.

U.S. crude sold off more sharply on concerns of another sharply weekly build in the United States.

(Additional reporting by Christopher Johnson in London, Henning Gloystein in Singapore and Robert Gibbons in New York; Editing by Dale Hudson, Michael Urquhart and Bernadette Baum)