Crude oil fell in New York, extending its worst yearly drop, on concern that a global economic contraction will limit fuel demand. Fuel consumption in the U.S., the world’s biggest economy, was down 3.7 percent during the four weeks ended Dec. 26 from a year earlier, according to the Department of Energy. Oil jumped 14 percent on Dec. 31 after a report showed U.S. fuel stockpiles climbed less than expected and the conflict between Israel and Hamas raised concern Middle East supplies may be disrupted. “That rally on the 31st didn’t have too much behind it so we’re seeing crude come back to a level more reflective of the fundamentals,” said Toby Hassall, an analyst with Commodity Warrants Australia in Sydney. “We still don’t have a clear picture of when a global recovery is going to take place.” Crude oil for February delivery dropped as much as $2.32, or 5.2 percent, to $42.28 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $42.54 a barrel at 2:13 p.m. Singapore time. Oil fell 54 percent in 2008, the first annual decline since 2001 and the biggest drop since futures trading started in 1983. The February contract rose $5.57 to $44.60 a barrel on Dec. 31, the highest settlement since Dec. 12. U.S. stocks plunged the most in 2008 since the Great Depression as financial shares collapsed, energy and metal producers tumbled and the world’s biggest economy suffered a yearlong recession. The Standard & Poor’s GSCI Index of 24 commodity futures lost 47 percent last year, the most since its introduction in 1971. The Reuters/Jefferies CRB Index of 19 raw materials dropped 40 percent, the biggest plunge since 1957. Oil Gains Crude oil may rise next week as the Organization of Petroleum Exporting Countries makes record production cuts to counter the deepest economic slump since World War II. Seven of 14 analysts surveyed by Bloomberg News, or 50 percent, said futures will gain through Jan. 9. Five respondents, or 36 percent, forecast oil will fall and two said there will be little change in prices. Last week, 46 percent of analysts said prices would drop. Oil has gained 14 percent this week amid geopolitical turmoil in the Middle East and Europe. Israel killed a Hamas leader in its assault on the Gaza Strip and Foreign Minister Tzipi Livni said her nation would keep applying pressure on the militant Islamic group. For the first time since the aerial bombardment started on Dec. 27, Israel yesterday killed a senior Hamas leader in an air strike. An army spokesman, speaking anonymously in accordance with regulations, said warplanes hit Nizar Rayyan’s house in the Jabaliya refugee camp. Russia, Ukraine In Europe, the repeat of an energy standoff between former Soviet neighbors threatened fuel shipments. Russia prepared to resume talks with Ukraine in their dispute over the price of natural gas after cutting supplies to its western neighbor for the second time in three years. The European Union urged Russia and Ukraine to “rapidly” resolve their dispute and said it counted on assurances gas supplies would continue uninterrupted. Ukrainian President Viktor Yushchenko said in a statement the two sides are near a compromise, urging state utility NAK Naftogaz Ukrainy and OAO Gazprom, Russia’s gas exporter, to meet again in the next one or two days. Gazprom also proposed talks. Brent crude oil for February settlement fell as much as $2.24, or 4.9 percent, to $43.35 a barrel on London’s ICE Futures Europe exchange. It was at $44.41 a barrel at 2:14 p.m. Singapore time. The contract on Dec. 31 rose $5.44, or 14 percent, to settle at $45.59 a barrel.

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