By Barani Krishnan
NEW YORK (Reuters) - U.S. crude fell below $60 a barrel on Thursday for the first time in five years, breaking through a key psychological support level that triggered fresh selling as some traders said they saw no reason for a rebound any time soon.
While better U.S. economic data supported the market earlier in the day, those gains could not be sustained toward the close. In the absence of any news that could temper the bearish mood, traders said pent-up pressure led to a late-selloff that carried on after the close, pushing prices as low as $58.96.
Traders and analysts said a bottom for oil remained elusive after a six-month selloff that has nearly halved price levels. Few could guess how low prices would go and when they might return to the $100 heyday last seen during the summer.
"For this market to come back quickly, you need a major event that would really shut off supply in a drastic way, like the trouble in Libya really getting out of hand or the Russians coming out and saying they'll lower their production, which nobody expects them to do anyway," said Joseph Posillico, senior vice president of energy futures at Jefferies in New York.
U.S. crude's front-month contract (CLc1) settled down 99 cents, or 1.6 percent, at $59.95 a barrel, after falling to $59.56, its lowest since July 2009. It fell another $1 a barrel after the close as traders bet on deeper losses.
Just in June, the front-month was at a nine-month high above $107 on supply disruptions caused by fighting in Iraq.
Brent crude's front-month (LCOc1) ended down 56 cents at $63.68, after the benchmark for global oil plumbed a 5-1/2-year low at $63.48. Brent traded above $115 in June.
Prices tanked for a second day in a row after Wednesday's 5 percent drop caused by a surprise jump in U.S. crude stocks and reiteration by Saudi Arabia's oil minister Ali al-Naimi - OPEC's most influential voice - that the kingdom will not cut output.
On Thursday, the market was relatively stable with intermittent, choppy trade, tumbling minutes before the close. Robust U.S. consumer spending data, a rate cut by Norway and concern that some oil drilling firms were already moving to cut exploration and production supported prices earlier.
Some traders said prices could churn in coming weeks if the market takes to speculating again about possible OPEC output cuts if Algeria and Venezuela convince the group to hold an emergency meeting early next year.
Others doubt that Saudi Arabia would agree to production cuts even if such a meeting is held.
"You can't force the 800-pound gorilla in OPEC to do anything when it has all the power and is producing the most oil in the world," Tariq Zahir, managing member at Tyche Capital Advisors in New York, said, referring to Saudi Arabia.
(Additional reporting by Alex Lawler in London and Adam Rose in Beijing; Editing by Michael Urquhart, David Gregorio and Marguerita Choy)