By David Sheppard
LONDON (Reuters) - Brent crude oil fell to a 5-year low near $65 a barrel in volatile trade on Tuesday, sliding for a sixth consecutive session on signs of a growing supply glut.
Prices briefly reversed losses to trade higher ahead of the U.S. open, with some investors betting the 40 percent-plus price slide since June was overdone.
But as U.S. equity markets opened lower oil prices quickly came off again, with traders refocusing on how fast-growing U.S. shale output has hurt the ability of the Organization of the Petroleum Exporting Countries (OPEC) to manage supply.
"Although talks of oil reaching its bottom are more rampant, we fail to see a reversal coming without stronger fundamentals," Daniel Ang of Phillip Futures said in a note.
Brent crude for January delivery was down 28 cents at $65.91 a barrel by 1447 GMT after falling as low as $65.29, its weakest since September 2009. Brent dropped 4.2 percent or $2.88 on Monday in its third-largest one-day loss this year.
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U.S. crude was down 7 cents at $62.98 a barrel, after hitting $62.25, its lowest since July 2009. It fell 4.2 percent or $2.79 on Monday.
Supply and demand will set the price of oil in coming months, an oil official from the United Arab Emirates said on Tuesday, in the latest sign OPEC Gulf producers are ready to weather lower prices after declining to cut output last month.
Industry sources said top OPEC exporter Saudi Arabia would keep crude sales at full contracted volumes for Asian term buyers in January, while the head of Kuwait's national oil company said on Monday oil would remain around $65 for months.
Commodity prices took some support on Tuesday from a dip in the dollar, which slid by about 0.6 percent against a basket of currencies, though it remains up about 12 percent since May. A weaker U.S. unit makes commodities priced in the dollar cheaper for holders of other currencies.
Brent averaged around $110 between 2011 and 2013 and topped $115 in June. Losses accelerated in late November after OPEC decided against reducing its output target, despite its forecasts of a surplus and calls from members including Iran and Venezuela to cut production.
Since then, Saudi Arabia and second-largest OPEC producer Iraq have cut monthly prices for the United States and Asia, in a move some analysts say shows OPEC members are competing for market share.
New U.S. projections show oil production from the big three U.S. shale plays should grow by more than 100,000 barrels per day by January.
However, many shale companies are starting to make deep cuts to spending for next year.
(Additional reporting by Adam Rose in Beijing; Editing by Michael Urquhart)