Crude oil prices dropped below $20 a barrel in London yesterday, triggering speculation that prices could fall as low as $14 a barrel by the end of the year.

In the United States, futures prices for heating oil, gasoline and crude oil continued a 10-day drop that has left prices at their lowest level since the late 1970s, with crude closing at $21.27 on the New York Mercantile Exchange. It was the lowest price recorded by the exchange since crude began trading in 1982.

An analyst at PaineWebber Inc. said that several trades took place in London yesterday on April contracts for a key type of crude oil from Britain's North Sea in the range of $19.25 to $19.50 a barrel.

The sharp drop in oil prices could boost economic growth of industrial nations and have an almost immediate impact on consumer costs for home heating oil and gasoline. Energy experts predicted those prices could drop within the next several weeks.

At the same time, the decline could mean more problems for nations like Mexico and Nigeria that count on oil revenue to pay off their large foreign debts, as well as large oil producers like Britain and the OPEC countries. Lower oil prices also would hurt domestic energy companies and the banks that have many energy loans on their books.

The plunge in the price of oil -- the result of a continuing worldwide glut in both crude and petroleum products -- could bring consumers lower heating bills and gasoline prices within several weeks, said Bryan Jacoboski, international oil analyst at PaineWebber in New York.

Crude and heating oil were expected to fall this spring as winter demand ended. But while few analysts had ruled out the possibility that prices would fall below $20 a barrel, few were confident before yesterday that they actually would.

"Many people for some reason have latched on to $20 a barrel as a magic carpet floor to oil prices," Jacoboski said. Even though the purchases below $20 a barrel yesterday involved only a few trades, he said, "it's still significant."

He said that breaking that barrier could trigger a flurry of trading by investors focused on that mark, helping to push prices even lower.

Analysts said that because futures prices were lower than daily market -- or spot -- prices, further price drops are likely. When oil prices are stable, spot prices usually are lower than prices promised on future trades.

Both heating oil and crude oil are at their lowest prices since 1979. Energy prices began their latest decline around Thanksgiving after Saudi Arabia announced it would boost production of crude oil significantly this winter. In November, increased shipments of imported oil began arriving in the United States as a result of the Saudi production increase, swelling an already oversupplied market.

A major price war is likely if the Saudis or other producers do not decrease output, analysts say.

According to Steve Hanke, chief economist at Friedberg Commodity Management Inc. in Toronto, the Saudis also hope that by increasing production and further depressing prices, members of the Organization of Petroleum Exporting Countries might be persuaded to adhere to production ceilings to prop up prices.

Assuming oil-producing nations outside OPEC continue to pump at current levels, OPEC members would have to limit output to 15.5 million barrels a day to match demand and keep prices from sliding, according to an analysis by a major U.S. energy company. But OPEC members have insisted their "fair share" of the market requires they produce more than 17 million barrels a day.

The demand for oil in the United States is expected to be flat despite continued growth in the economy because of the effects of continued energy conservation.

The futures price of crude oil has dropped more than $3 a barrel from early last week. A barrel is the equivalent of 42 gallons.

On the New York Mercantile Exchange, contracts for February delivery of West Texas Intermediate crude oil, the benchmark U.S. grade, slid $2.26 a barrel to close at $21.27. That contract traded at $25.15 a barrel last Friday, before the latest price drop began.

Oil traded on the spot market, which brought $32 a barrel in November, fell $2.25 a barrel to $21.70 yesterday.

Heating oil fell to 59 cents a gallon from Friday's close of 63.89 cents for February delivery. February contracts for unleaded gasoline dropped to 59.79 cents a gallon from 64 cents, and regular gasoline fell to 58.90 cents from 63.28 cents.

Exxon Corp., meanwhile, said yesterday it lowered the price it pays for West Texas intermediate crude by 50 cents a barrel, to $27.50. It said it reduced other crude prices by an average of 75 cents a barrel.