How to use Rules to send separate email to every user referenced in user reference field?
You should create a rule that looks like so (in Rules export format):

{ "rules_send_email_to_selected_email_ids" : {
    "LABEL" : "Send eMail to selected eMail IDs",
    "PLUGIN" : "reaction rule",
    "OWNER" : "rules",
    "REQUIRES" : [ "rules" ],
    "ON" : {
      "node_insert--article" : { "bundle" : "article" }
    },
    "DO" : [
      { "LOOP" : {
          "USING" : { "list" : [ "node:field-email-addresses" ] },
          "ITEM" : { "current_email_id" : "Current eMail ID" },
          "DO" : [
            { "drupal_message" : { "message" : "An eMail about this new content with title \u0022[node:title]\u0022 and URL [node:url] will be delivered to [current-email-id:value]." } },
            { "mail" : {
                "to" : "[current-email-id:value]",
                "subject" : "You have new mail ...",
                "message" : "New content was created with title [node:title] ... You can read about it at [node:url].",
                "language" : [ "" ]
              }
            }
          ]
        }
      }
    ]
  }
}


Some more details about the above rule:


Rules Event: After saving new content of type "Article" (adapt the type to fit your needs, ie to XYZ).
Rules Action: a "loop" for all selected values of a multi value select list (which contains the eMail IDs), with machine name field_email_addresses (adapt the machine name to fit your needs). For each item (= current_email_id), an eMail is created with some subject and message that also contains the title and url of the node being created. Note: this will send 1 separated eMail to each of the selected eMail IDs (there is no way to send a single eMail to all selected eMail IDs).


If you have the Rules UI enabled, you can import the above rule in your own site, after you adapt the machine names of the content type and the field name containing the list of eMail Ids.

After you're convinced the rule works as expected, you may want to remove the Rules Action that displays a message after the node is saved (with drupal_message).

Video tutorial: have a look at the List and loops video which show a similar scenario.

Update

If you don't have such field with eMail IDs, but a field which is an entity reference field to user ids, then you can use a minor variation of the above rule. Instead of field_email_addresses, you'd want to loop over the list of users (indicated via the user reference field, let's assume it's named field_user_ids). And for each "item" (which I'd name "current_userid"), in the "to" field you'd use the current-userid:mail token for the user being processed. Here is how such rule could look like (in Rules export format):

{ "rules_send_email_to_selected_user_ids" : {
    "LABEL" : "Send eMail to selected user IDs",
    "PLUGIN" : "reaction rule",
    "OWNER" : "rules",
    "REQUIRES" : [ "rules" ],
    "ON" : {
      "node_insert--article" : { "bundle" : "article" }
    },
    "DO" : [
      { "LOOP" : {
          "USING" : { "list" : [ "node:field-user-ids" ] },
          "ITEM" : { "current_userid" : "Current user ID" },
          "DO" : [
            { "drupal_message" : { "message" : "An eMail about this new content with title \u0022[node:title]\u0022 and URL [node:url] will be delivered to eMail ID [current-userid:mail]." } },
            { "mail" : {
                "to" : "[current-userid:mail]",
                "subject" : "You have new mail ...",
                "message" : "New content was created with title [node:title] ... You can read about it at [node:url].",
                "language" : [ "" ]
              }
            }
          ]
        }
      }
    ]
  }
}