VIENNA -- Crude futures fell more than $1 a barrel yesterday amid mild weather in the US Northeast on the first trading day of the new year.
Prices spiked last week after militant attacks in Riyadh, Saudi Arabia, sent jitters through the market on fears that the supply chain might be broken in the world's leading crude exporter.
But analysts suggested those strikes were no longer affecting the market despite lingering concerns sparked by a call last month by Al Qaeda terror network leader Osama bin Laden for attacks on oil pipelines in the Middle East.
"The market was panicked but fears essentially evaporated . . . since there was no follow-up," said Deborah White, senior economist for energy at SG Securities in Paris.
Another factor sending prices lower, White said, was that production outages in Canada and the North Sea were about to end, leading to, in the short term, an extra 300,000 barrels a day on the market.
Light sweet crude for February delivery fell $1.41 to settle at $42.12 a barrel on the New York Mercantile Exchange.
London's International Petroleum Exchange was closed yesterday for a holiday.
February heating oil futures plummeted 6.04 cents to $1.1922 per gallon on Nymex, where February natural gas futures declined by 35.9 cents to $5.79 per 1,000 cubic feet and February gasoline futures slipped less than a penny to $1.1317 per gallon.
Additionally, despite falling more than $13 per barrel since hitting record highs in late October, the price of crude remains about 25 percent higher than it was a year ago.