Oil falls to below $42 a barrel in Asia

Oil prices fell below $42 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 $3.05 to $41.55 a barrel in electronic trading on the New York Mercantile Exchange by afternoon 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.

Russia's gas monopoly Gazprom shut off gas supplies after talks broke down over Ukraine's payments for past shipments and a new price contract for 2009. Gazprom said it had boosted natural gas deliveries through other pipelines to Western Europe.

The European Union depends on Russia for about a quarter of its gas, with some 80 per cent of that delivered through pipelines controlled by Ukraine.

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.

Oil prices began 2009 the same way they spent the most of the second half of 2008 _ going down. Crude peaked at $147.27 a barrel in July before plummeting to as low as $33.87 on Dec. 19.

Prices fell 54 per cent last year after soaring 57 per cent in 2007.

Investors remain focused on the slowing global economy and its impact on crude demand. The Department of Energy said earlier this week that U.S. fuel consumption fell 3.7 per cent in the four weeks ended Dec. 26 from a year earlier.

In other Nymex trading, gasoline futures fell 3.55 cents to $1.03 a gallon. Heating oil dropped 3.55 cents to $1.41 a gallon while natural gas for February delivery slid 2.2 cents to $5.60 per 1,000 cubic feet.

In London, February Brent crude fell $3.31 to $42.28 a barrel on the ICE Futures exchange.

Source: Agencies

3M to cut 1,800 jobs globally in Q4

3M Co is cutting 1,800 jobs in the fourth quarter and ordering some workers to take vacation or unpaid time off for the last two weeks of the year.

3M spokeswoman Jackie Berry told the Star Tribune for a story posted Friday night that the worsening economy forced the cuts. She told the newspaper she didn't have a dollar amount on how much the company expects to save. The company is also postponing merit pay for next year, she said.

The Maplewood-based manufacturer had earlier announced 1,000 job cuts in the third quarter, which ended Sept. 30. The 1,800 new layoffs will come from the U.S., Western Europe and other developed nations.

Berry didn't say where specific cuts would be made, but told the Star Tribune "several hundred" will be in the United States.

Berry and other 3M spokespeople did not immediately return phone messages left by The Associated Press.

Along with the job cuts, 3M is pushing hundreds of workers to take vacation or unpaid time off for one to two weeks this month, the newspaper reported.

Berry said merit pay is normally distributed annually in April.

"What we have done is delay that merit increase," she said. "It's not part of the 2009 plan. However, that could change if the economic conditions are better than expected."

Source: Agencies