NEW YORK, USA (AFP) — World oil prices slipped Friday, ending a volatile year for the market roiled by Arab Spring unrest and rising tensions between the United States and major crude producer Iran.

New York’s main contract West Texas Intermediate crude for February delivery, fell 82 cents to close at US$98.83 a barrel.

In London, Brent North Sea crude for February dropped 63 cents to US$107.38 a barrel.

The two oil markets will be closed Monday in observance of the New Year holiday.

For the year, crude oil prices rose about eight per cent in New York and 13 per cent in London, relatively modest increases in a year marked by uprisings in the oil-rich Middle East and North Africa region, including the civil war in key producer Libya.

London Brent oil surged as high as US$127.02 per barrel in April and New York crude hit a two-and-a-half year peak at US$114.83 in early May.

“The market moved relatively sideways yesterday and today. I think you’re just seeing very light trading with the end of the year, minor moves as people are closing their positions,” said Jason Schenker at Prestige Economics.

Schenker predicted the New York benchmark contract would average US$96 in the first three months of 2012, but added a note of caution.

“There is significant downside risk when people come back into the office next week,” he said.

“The European situation is not resolved, global growth is still slowing and despite the geopolitical risks, there are a number of bearish factors.”

A showdown between Iran and the United States over Tehran’s threats to close the Strait of Hormuz — a critical passage for more than a third of the world’s oil — is the main factor influencing short-term crude prices, analysts said.

Traders remain on edge over the eurozone debt drama, amid concern that it could spark another sharp economic downturn and slash global demand for energy and other major raw materials.

Investors are also worried about the prospect of a sharp economic slowdown in China — the world’s biggest energy consumer.