Oil Below $60 as OPEC, Russians Keep Pumping

London: Brent crude oil traded below $60 per barrel on Wednesday, near 5-1/2 year lows, as major oil producers signaled that they would maintain output despite a supply glut and faltering demand in Russia and Europe.

Core Gulf OPEC members have said they are prepared to wait as long as a year for the market to stabilise, undercutting hopes they will step it to stem crude price losses.

Oil prices have almost halved over the last six months as increasing volumes of light, high quality oil from North America from shale have overwhelmed demand.

"Every day now you have some Gulf OPEC member actively trying to talk the market down," said Olivier Jakob, oil analyst at Petromatrix. "OPEC is trying to choke US oil producers."

Brent for February was down 50 cents at $59.51 a barrel by 0935 GMT (2:55 p.m. in India). The January Brent contract, which expired in the prior session, hit a low of $58.50 on Tuesday - the weakest since May 2009.

US crude dropped 80 cents to $55.13 a barrel after touching the lowest since May 2009 at $53.60 on Tuesday.

Russian Energy Minister Alexander Novak has said Moscow will not cut output in 2015, even if pressure on its finances rises with the economy showing signs of a severe stress.

The rouble has been hit hard, prompting Russia's central bank to begin selling part of foreign currency holdings worth $7 billion in an effort to halt a collapse in its currency.

European shares opened trading lower on Wednesday as the market reacted to fears over a budding economic crisis in Russia.

"The story is still the same. Europe is weak, China is weak, and the US economy is growing by a bit. It's a supply story," said Avtar Sandu, senior manager for commodities at Phillip Futures in Singapore.

"The only thing is that the markets are very oversold and oil is extremely cheap at these levels," he added.

In the United States, crude inventories rose by 1.9 million barrels last week, compared with analysts' expectations for a decrease of 2.4 million barrels, data from the American Petroleum Institute showed late on Tuesday.

Copyright @ Thomson Reuters 2013