LONDON, Nov 9: World oil prices slumped to six-week lows on Tuesday, tumbling below $48 briefly in New York as fears of a winter supply crunch during the northern winter subsided, analysts said.

New York's main contract, light sweet crude for delivery in December, dropped by as much as $1.34, or 2.7 per cent, to $47.75 a barrel in early deals.

It later recovered somewhat to $48.20, down 89 cents from Monday's close.

In London, Brent North Sea crude for December delivery slumped by $1.17 to $44.75 a barrel in late afternoon trading, having earlier dropped to as low as $44.10.

"Oil is down because the expectations are that inventories are rising and the US is finally recovering from the outages caused by Hurricane Ivan in mid-September," said Deutsche Bank analyst Adam Sieminski.

"Opec's production is very high and global demand is probably slowing down because we had 50-dollar oil, and it scared everybody to death."

The US contract has fallen by as much as 14 per cent from an October 25 record summit of $55.67 as US crude oil inventories recover and sky-high prices put the brakes on global demand.

"We still haven't seen that much cold weather, and there has been significant inventory building in crude," US-based Wachovia analyst Jason Schenker said, adding: "The supply disruption premium is diminishing."

Traders were optimistic that the latest snapshot of US inventories due on Wednesday from the Department of Energy would show fresh rises, after an increase of 10 million barrels in crude stocks over the previous two weeks.

"Early expectations of stocks figures are likely to be bearish with builds across the board," said Robert Laughlin, director of trading at energy brokerage firm GNI-Man Financial. "I think the trend (for prices) is definitely down."

Analysts were divided on whether markets might retest their highs during the northern winter.

"I think on a fundamentals basis we've seen the peaks but I wouldn't completely relax because the potential for problems in Iraq or other events of that nature are still very much a factor in the market place," said Sieminski.

However, analysts at Barclays Capital said that despite current weakness, "fundamentals are still pointing to the potential for fresh highs in oil prices."

Meanwhile, World Trade Organization chief Supachai Panitchpakdi on Tuesday painted an optimistic scenario for the global economy, saying rising oil prices might not have a major negative impact.

"If the market changes because economic activity is coming up ... there will be implications for the oil price. This is a natural cyclical movement in the overall economy," Mr Supachai told the Businessweek CEO Forum in Beijing.

He said a $10 rise in oil prices would probably cut global economic growth by 0.3 percentage points, arguing it was of minor importance at a time when the world's gross domestic product was expanding by about five per cent.-AFP