Brent crude oil hit a fresh five-year low on Tuesday before steadying near $66 a barrel as some cautious buying emerged following a 43 per cent price slide since June.

Fast-growing US shale output has hurt the ability of the Organization of Petroleum Exporting Countries to manage supplies, sending prices sharply lower in anticipation of a large oil glut early next year.

Supply and demand will set the prices for 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.

“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 up 2 cents at $66.21 a barrel by 0940 GMT after falling as low as $65.29, its weakest since September 2009. Brent had fallen fell by 4.2 per cent or $2.88 on Monday in its third-largest one-day loss this year.

US crude was up 23 cents at $63.28 a barrel, bouncing after briefly hitting $62.25, its lowest since July 2009. It fell 4.2 per cent or $2.79 on Monday.

Crude sales

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 had said on Monday that oil would remain around $65 a barrel for months.

Norwegian brokerage DNB Markets said that excess supplies could push Brent down to the $50s in the first half of 2015 as it lowered its average year forecast by $10 to $70 per barrel.

Brent prices 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 own 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 both cut monthly prices for the United States and Asia, in a move some analysts say shows OPEC members are competing for market share.

US shale gas

New US projections show oil production from the big three US 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.

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