Oil prices fell below $43 a barrel Friday in Asia after Russia and Ukraine said a dispute over natural gas payments wouldn't affect shipments to Western Europe.
Light, sweet crude for February delivery fell $1.73 to $42.84 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. Trading was closed Thursday for New Year's Day.
The contract rose $5.57 on Wednesday, the last trading day of 2008, to settle at $44.60 after Russia threatened to cut off natural gas supplies to Ukraine. Russia followed through with that threat Thursday, though both countries pledged they would keep supplies to the rest of Europe flowing.
Concerns that the week-old conflict between Israel and Hamas in Gaza could disrupt supplies in the oil-rich Middle East helped keep prices from falling further. Israeli troops massed on the Gaza border Thursday in preparation for a possible ground offensive.
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