Oil Prices Slump Again

Updated from 2:10 p.m. EST

Crude oil prices closed down but well off their lows Monday, after a long holiday weekend, with the benchmark U.S crude under pressure again because of unseasonably warm weather.

The February futures contract lost $1.33 to $42.12 a barrel in Nymex floor trading, having been down more than $2 at one point in the session. It was the market's third losing session in a row.

Prices are almost 25% below their record closing high of $55.17 in late October. Nevertheless, the benchmark crude closed at $33.78 on the first trading day of the year in 2003.

Traders place unusual emphasis on weather patterns at this time of year when demand for heating oil in the U.S. and Europe is at its peak. The recent swing in temperatures has had a similar effect on prices.

U.S. trading resumed Monday after a three-day break for the New Year's holiday.

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