LONDON, Nov 1: Oil prices fell heavily on Monday, taking US crude below $50 on speculation that a US election win for Senator John Kerry could ease the geopolitical friction that helped spark this year's record rally.

US light crude fell as low as $49.40 a barrel before retracing to $49.90 a barrel, down $1.86. US crude has spent nearly a month above $50 and peaked a week ago at $55.67.

London Brent lost $2.18 to $46.80 a barrel.

Energy analysts said a win for the challenger Kerry in Tuesday's US poll could mean lower crude prices than if President George W. Bush is re-elected. Most opinion polls put Bush narrowly ahead.

"Under a Kerry administration we'd likely have a much more interventionist SPR (Strategic Petroleum Reserve) policy," said Jamal Qureshi, market analyst at PFC Energy in Washington.

"And when you look out a bit further, Bush is more likely to be aggressive in the Middle East, particularly in Iran."

PFC is forecasting an average US crude price of $43 a barrel in 2005 should Kerry win, compared to $48 a barrel in the event Bush triumphs. It sees $52 on average in the first quarter 2005 under Bush compared to $45 under Kerry.

PFC says a Bush win could stoke nervousness about US policies in the oil producing Middle East while Kerry is seen as more likely to work through conventional diplomatic channels.

Another difference between is the two candidates' approach to the nation's emergency crude oil stockpile.

The Bush administration continues to add oil to the 670 million-barrel Strategic Petroleum Reserve (SPR) despite high prices.

Kerry says he would stop filling it at current prices to keep more crude on the market. That difference is important for the world oil market, now suffering a shortage of light, sweet crude, which makes up about 40 per cent of the SPR.

A Kerry victory could also mean more financing for energy sources like wind and solar and trigger a push for tighter mileage standards for gas-guzzling sport utility vehicles.

The Massachusetts senator backs a 10-year, $30 billion energy package that includes $10 billion to build cleaner coal-fired power plants and $10 billion to help US auto makers retool to build more fuel-efficient cars.

With US prices holding above $50 a barrel for the past month, traders also are wary of economic data that shows signs higher energy costs are eating into economic performance, curtailing oil demand growth.-Reuters