* FTSEurofirst 300 down 1 pct, last full trading day of 2014
* Germany's DAX ends year with annual 2.7 pct gain
* Oil& gas stocks down 1.8 pct after Brent hits new low
* Retailer Next up 3.2 pct as Christmas sales boost profit outlook (Adds closing levels, details, quotes)
By Francesco Canepa and Lionel Laurent
LONDON, Dec 30 (Reuters) - European shares fell on Tuesday, the last full trading day of the year, with energy companies hit as Brent oil touched a 5-1/2-year low on persistent concerns about a global supply glut.
The STOXX Europe 600 oil & gas index dropped 1.8 percent, taking its loss for the year to 15 percent. The price of Brent crude has fallen by about half since June due to a big oversupply and tepid demand, hitting energy companies hard.
Trading activity was subdued overall, with uncertainty in Greece also weighing on markets ahead of a Jan. 25 election that polls indicate the leftist anti-bailout Syriza party could win.
"The global markets are suffering with a post-Santa rally hangover," said Spreadex analyst Connor Campbell.
But despite a skittish end to 2014, European shares looked set to finish the year close to their post-crisis highs, helped by investor expectations that the European Central Bank will launch more market-friendly measures to stave off deflation.
Germany's blue-chip DAX index, which closed early on Tuesday for the new year holiday, ended 2014 near an all-time high reached in December and posted a 2.7 percent annual gain. Most other European markets will close for the year on Wednesday, with pan-European trading set to resume on Friday.
The FTSEurofirst 300 index of pan-European shares fell 1 percent on Tuesday to 1,362.85 points. The index, however, has gained around 4 percent year-to-date.
"Contagion risks from Greece should be contained," Goldman Sachs analysts said in a note to clients. "The prospect of sovereign QE (bond-buying by the ECB) early next year, which we think will take place regardless of developments in Greece, is also acting to reduce spill-over effects in the ... bond markets."
Energy companies such as Seadrill and Galp Energia were down by 3 to 4 percent on the day. Paris-based energy major Total and London-based BG Group fell by 2.3 to 2.8 percent.
"The massive drop in oil prices means the energy sector has been put under significant strain with many companies facing investment projects that no longer make sense," said CMC Markets analyst Jasper Lawler.
"History suggests the result can only be consolidation and bankruptcy within the oil industry."
UK retailer Next bucked the trend, rising 3.2 percent after it lifted its full-year profit guidance on the back of a 2.9 percent rise in sales in the run up to Christmas.
Greek shares were down 0.5 percent after falling nearly 4 percent on Monday, when the parliament in Athens failed to elect a head of state, triggering the early general election. Lender Bank of Piraeus slumped 6 percent on Tuesday.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Reporting by Francesco Canepa and Lionel Laurent; Editing by Susan Thomas and Susan Fenton)