By Megan Davies and Nick Brown NEW YORK/SAN JUAN (Reuters) - Puerto Rico has begun to default on its debt in order to pay top-priority borrowings backed by its constitution and protect the commonwealth's people, Governor Alejandro Garcia Padilla said on Tuesday, but the status of a Dec. 1 payment remained unclear. There had been speculation that the U.S. territory would default on all or part of its $355 million notes issued by its financing arm, the Government Development Bank, and due Dec. 1. "The imminence of a default when presented with the alternative between paying creditors and providing essential government services looms large," Garcia Padilla told the U.S. Senate Judiciary Committee.
Crude futures were down on Tuesday on bets that OPEC will not cut output to stem a supply glut when the world's biggest oil producers meet this week, although a rally in U.S. gasoline and a weak dollar limited losses on the petroleum complex. Trading has been sluggish ahead of the Organization of the Petroleum Exporting Countries' meeting in Vienna on Friday amid worries the group will choose to keep output high to defend market share against non-member oil producers such as the United States and Russia. U.S. jobs data for November are also due on Friday, and likely to keep oil prices range bound till then, traders said.