Investing.com - Oil prices tumbled on Monday after a key OPEC country said the oil cartel won't trim output to shore up prices, which fueled ongoing concerns that supply far outstrips demand.
In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in February traded down 2.31% at $56.74 a barrel during U.S. trading, up from a session low of $56.25 a barrel and off a high of $59.00 a barrel.
The February contract settled down 3.51% at $58.08 a barrel on Friday.
Support for the commodity was seen at $56.07 a barrel, the low from May 15, 2009, and resistance at $65.61 a barrel, last Monday's high.
The United Arab Emirates said earlier that OPEC will stand by its recent decision not to trim output to shore up slumping oil prices, news that sent crude futures plunging on Monday.
London-traded Brent prices have fallen nearly 47% since June, when the commodity hit $115.71, while WTI futures are down almost 46% from a peak of $107.50 in June.
Oil prices firmed earlier this year on expectations for a more robust U.S. economy to consume more fuel and energy as well as on geopolitical concerns.
While the U.S. economy continues to expand, other major economies are seeing their growth rates cool, which has softened oil prices.
Furthermore, military conflicts in the Ukraine, Syria, Iraq and elsewhere have not disrupted supply as once feared, which is allowing oil prices to slide further.
OPEC countries are presumably allowing prices to fall with the aim of sideling U.S. shale producers, who cost more to produce oil.
On Friday the International Energy Agency said oil supply will remain ample for some time to come.
"Barring a disorderly production response, it may well take some time for supply and demand to respond to the price rout," the IEA said in its report.
"When it comes to supply, lower oil prices are already slashing producers' spending, but this is more likely to affect medium- and long-term output than short-term supplies. So long is the lead of oil projects that price swings can take time to work their way through to supply. Projects that have already been funded will for the most part go on."
Non-OPEC countries will also contribute to global supply.
The IEA also said it had cut its 2015 global oil demand growth forecast by 230,000 barrels per day to 0.9 million bpd.
Elsewhere, fears of supply disruptions in Libya due to renewed conflict there failed to overshadow the announcement out of the United Arab Emirates.
Separately, on the ICE Futures Exchange in London, Brent oil futures for January delivery were down 1.18% at US$61.42 a barrel, while the spread between Brent and U.S. crude contracts stood at $4.68.