* Oil hits 7-year low on OPEC unease
* No end in sight for supply glut
* Resources stocks weaker across the board
SYDNEY/WELLINGTON, Dec 8 (Reuters) - Australian shares fell to their lowest intraday level in three weeks on Tuesday as tumbling oil and base metals prices dragged resources stocks sharply lower.
Overnight, oil prices LCOc1 skidded to their lowest level in seven years after a meeting of members of the Organization of the Petroleum Exporting Countries ended in disagreement over production cuts and without a reference to its output ceiling.
Meanwhile iron ore, Australia's biggest export earner, continued trading around the multi-year lows which have put pressure on the industry throughout 2015 amid expecations Chinese demand will shrink next year.
By 0126 GMT, the S&P/ASX 200 index .AXJO was down 36.4 points or 0.7 percent at 5,118.3, its lowest since Nov. 18. The benchmark is down 5.4 percent so far this year.
"The oil prices and energy stocks have developed their own bit of momentum and it's difficult to know where it's going to stop," said Angus Nicholson, a market analyst at IG Markets.
"There's nothing stopping the huge supply of oil coming into the market."
Oil Search OSH.AX led energy stocks lower, down 16 percent, after rival Woodside Petroleum WPL.AX said it cancelled takeover talks. Woodside fell 4 percent.
Santos slumped 14 percent, hitting its lowest since 2000, as investors revalued the stock before a batch of new shares issued in a capital raising begin trading on Friday.
Among the beneficiaries of the lower oil price, Qantas Airways QAN.AX rose 5 percent thanks to cheaper fuel, while road owner Transurban added 1 percent.
Broader resources also fell, in line with the prices of iron ore and other base metals. BHP Billiton (L:BLT) BHP.AX was down 4.6 percent and rival Rio Tinto (L:RIO) RIO.AX shed 3.4 percent, while BHP spinoff South32 S32.AX dipped 6.3 percent.
Banks fared better. Westpac Banking Corp WBC.AX and Australia and New Zealand Banking Group ANZ.AX were 1 percent weaker, while Commlonwealth Bank of Australia and National Australia Bank declined about 0.5 percent.
New Zealand's benchmark NZX 50 index fell 0.3 percent or 16.3 points to 6,048.1.
Health stocks led the declines, with technology-focused Orion Health Group OHE.NZ falling 2.4 percent and medical devices company Fisher and Paykel Healthcare losing 1.6 percent. Property fund Vital Healthcare VHP.NZ rose 1.09 percent after settling a strategic land acquisition.
Telecommunications companies also fell, with Spark NZ and Chorus both fell 1.29 percent.
Air New Zealand rose 0.72 percent after signing a memorandum of understanding with Argentina's tourism body last week.