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Oil falls near $79 as Ida weakens Oil sinks nearly 3% after jobs report Oil slips below $80 Oil recovers to post gains Oil slides on weak consumer data Oil climbs 3% on GDP growth

NEW YORK (CNNMoney.com) -- Oil prices continued to edge lower Tuesday ahead of the Christmas holiday.

U.S. crude for February delivery fell 93 cents to settle at $38.98 a barrel.

New York trading will have a half-day session on Wednesday and close on Thursday for Christmas Day. Trading will resume on Friday morning for a full session.

Trading is light this week because of the holiday, so small changes in price Tuesday don't carry a lot of weight, according to Steve Brassey, senior broker with Sonic Futures in San Jose, Calif.

"People are in holiday mode - they're looking to check out," he said.

The same concerns about crude demand that have been dragging down oil prices for the past several months remain, according to Brassey. Prices closed below $40 a barrel on Monday as investors worried about falling demand due to the slowing global economy.

"I don't think we've made bottom yet. [Oil] might have to slip all the way down to $30 a barrel," Brassey said.

Crude prices have fallen more than $100 a barrel since hitting a record high of $147.27 a barrel in mid-July.

Demand: Investors are worried that the weakening global economy translates into falling demand for petroleum-based fuel.

In the U.S., the world's largest oil consumer, the government affirmed that the country's gross domestic product, the sum of all locally produced goods and services, shrank at an annual rate of 0.5% last quarter.

While the move was in line with economists' expectations, according to a Briefing.com poll, it was still a large decline from 2.8% growth in the previous quarter.

In Europe, the GDP of the United Kingdom contracted by 0.6% in the third quarter, the U.K. government said Tuesday.

And in Asia, Japan reported a massive $2.5 billion trade deficit due to slumping exports. Auto giant Toyota (TM) predicted its first yearly operating loss in modern history.

Inventory: To get a more recent view of demand levels in the U.S., investors will be looking ahead to the government's weekly petroleum inventory report on Wednesday.

Crude stockpiles are expected to have risen by 1.5 million barrels last week, according to analysts surveyed by information firm Platts.

An increase in crude stocks could be a sign that U.S. refiners are well supplied, and may not need to purchase as much oil in the current week.

Investors were also expecting a 900,000-barrel increase in gasoline supplies, and a 1.4 million barrel increase in supplies of distillates, which are used to make diesel fuel and home heating oil.

OPEC: Oil's rapid decline in price has been painful for many oil producing countries.

Battle-scarred Iraq said Tuesday that its oil revenue had fallen by more than 25% in November, even though it exported 52.8 million barrels in the month, the same as in October.

Due to the present conflict, Iraq, a member of petroleum trade group OPEC, is not required to hold to any production quotas set forth by the group.

The Organization of Petroleum Exporting Countries, whose members produce about 40% of the world's oil, pledged last week to cut production by 2.2 million barrels a day in order to keep oil from sliding.

However, the announcement had little effect. "They can say all they want about slashing production," Brassey said, but investors remain concerned that oil is oversupplied.

After announcing the cuts last week, prices continued to slide, falling $3.54 a barrel as investors speculated the group may not be able to keep its quotas.