LONDON, Dec 29: The price of oil hovered at about $60 per barrel on the last day of trading in 2006, ending the year 23 per cent lower than its record of more than $78 struck in July.

Crude futures finished 2006 on a slightly weak note in both New York and London as the market dismissed a sharp drop in US crude stockpiles, dealers said.

Traders instead preferred to focus on the mild winter in the United States, which has led to a drop in demand for heating fuel.

New York’s main contract, light sweet crude for delivery in February, dropped to below $60 at $59.96 shortly after the start of pit trading. This marked the lowest point since November 27.

It later stood at $60.27 per barrel, down 26 cents.

In London, Brent North Sea crude for February delivery fell 36 cents to reach $60.31 in electronic trading.Oil prices have tumbled since rocketing to record high points during the northern hemisphere summer, owing to unrest in the oil-rich Middle East and supply disruptions.

In July, light sweet crude hit a peak of $78.40 per barrel in New York. In August, Brent North Sea crude reached an all-time high of $78.64 per barrel in London.

These levels put oil prices $20 higher compared with the start of 2006 and four times higher compared with 2002.However they have since dived owing to high levels of US energy inventories and mild temperatures in the United States, while traders are beginning to overlook unrest in oil-producing countries such as Nigeria and Iran.

On Friday, “crude futures were slightly lower as market participants square positions before the long weekend, amid mild weather conditions in the US”, Sucden analyst Michael Davies said.

World oil prices had firmed only slightly on Thursday, despite a massive drop in stockpiles of US crude last week.—AFP