Crude futures settled near $44 a barrel in light, pre-holiday trade Thursday as another pipeline attack in Iraq followed news that authorities in Moscow effectively re-nationalized the main production unit of Yukos (search).

Light, sweet crude for February delivery slid 6 cents Thursday to $44.18 per barrel on the New York Mercantile Exchange (search), where prices plunged $1.52 a day earlier after the U.S. government reported a surprise increase in supplies of oil and distillate fuel, which includes heating oil and diesel.

While oil futures are about 20 percent cheaper than they were two months ago, they remain 38 percent higher than a year ago. Today's prices would need to more than double, though, to surpass the inflation-adjusted all-time high, which was set in 1980.

In London, Brent crude rose 7 cents on Thursday to $40.71 per barrel on the International Petroleum Exchange.

With trading volume thin and markets closed on Friday for Christmas, analysts said they expected little change in prices between now and the new year.

"The market will become very slow from now all the way until the first week of January," said Esa Ramasamy, oil editorial manager for energy reporting agency Platts in Singapore.

Wednesday's marked retreat in oil prices came as the Department of Energy (search) said the commercially available supply of crude oil and distillate fuel grew. Most traders had expected the numbers to show the opposite trend.

The gain helped ease nagging fears of a supply shortfall in the U.S. if the weather turned exceptionally cold.

Over the past two months, oil traders have become fixated about how cold the winter will be in the United States and whether there is enough heating oil to cope with any spike in demand.

Oil prices raced to record highs above $55 a barrel this year due to a sharper than expected increase in worldwide energy consumption, particularly in China, and a dearth of excess production capacity. Prices were also bumped higher on fears that output could be disrupted in key producing countries such as Iraq, Nigeria and Russia.

In Iraq on Thursday saboteurs damaged a pipeline that supplies Baghdad with oil from the northern refinery of Beiji, the oil ministry said. It said the pipeline feeds Baghdad's storage facility and that oil supplies through the line have stopped.

In Russia, state-owned oil company Rosneft bought BaikalFinansGroup, a previously unknown company that on Sunday acquired Yukos' Yuganskneftegaz production unit for $9.3 billion in a government-ordered auction.

The two transactions effectively place Yuganskneftegaz (search) — which produces more than 1 million barrels of crude a day — back under state control. Moscow has been locked in a bitter struggle with Yukos for months, and arranged the auction to cover part of what it says is the company's unpaid tax bill of $28 billion.

During the protracted showdown between the Kremlin and Yukos, oil traders have periodically fretted that production may suffer, supporting higher prices. Yuganskneftegaz pumps about 11 percent of Russia's oil.

In other Nymex trading, heating oil futures fell 3.24 cents to $1.3261 per gallon, gasoline futures dropped 1.63 cents to $1.1293 per gallon and natural gas futures slid 15.2 cents to $6.668 per 1,000 cubic feet.