LONDON, Nov 4 (AFP) - Oil prices fell Thursday, giving up some of the gains seen in the wake of US President George W. Bush's re-election win, as a rise in US crude inventories soothed worries about possible supply shortages.
New York's main contract, light sweet crude for delivery in December, was down 38 cents at 50.50 dollars a barrel in early deals around 1700 GMT.
US crude oil futures finished at 50.88 dollars a barrel on Wednesday, up 1.26 dollars on the day, after plunging to a low of 48.65 in volatile trading.
In London, Brent North Sea crude for December dropped by 26 cents to 47.30 dollars in late deals Thursday, after surging by 1.01 dollars a day earlier.
"The recovery overnight after Bush was reelected was overdone, and prices are pausing now," GNI-Man Financial trader Kevin Blemkin said.
World crude oil prices jumped, fell and then soared again Wednesday on a market swept by speculation over the implications of Bush's electoral victory.
"A Bush victory in the US presidential election outweighed the earlier bearish data revealing a rise in crude inventories, lifting the price of crude higher for the close," noted analysts at the Sucden brokerage firm.
The US Energy Department said Wednesday that crude oil inventories climbed by 6.3 million barrels to 289.7 million barrels in the week to October 29.
However, distillates -- mostly crucial heating oil and diesel -- fell for the seventh consecutive week. They dropped 900,000 barrels to 115.7 million, below the average range, as the northern hemisphere winter neared.
The market has been concerned that demand for heating fuel will drive oil prices up, especially if the winter is harsher than expected.
With Bush back in the White House, and supply and security worries still hanging over markets, prices could resume their upwards march over the northern hemisphere winter, analysts said.
"There are clearly upside risks to oil prices across the winter ... Nigeria's strikes, Iran's nukes, Iraq's elections, weather," Deutsche Bank analysts wrote in a note to clients.
"However, we expect 2005 demand to more closely match non-OPEC supply growth, and with OPEC adding around 1.5 million barrels per day, they should be able to retake control of oil markets next year."
OPEC president Purnomo Yusgiantoro said the cartel will monitor any impact from the re-election of US President George W. Bush on oil prices.
"The US election has reportedly had some impact on oil price movements. We will monitor the extent to which the elections impact on oil prices," Yusgiantoro, who is Indonesia's energy minister, told reporters in Jakarta.
"As OPEC president, I have always expected oil prices to go down," he said.
Stephen Roach, chief economist for US investment bank Morgan Stanley, warned the combination of high oil prices and a ballooning US current account deficit could push the world into a recession next year.
"Oil prices are 65 percent above the average that prevailed over the preceding four years," Roach told the bank's Asia-Pacific Summit, an annual business forum in Singapore.
"If oil holds at 50 US dollars per barrel for over a month or two, that will qualify as a formal oil shock that has a significant recessionary risk for 2005."

11/04/2004 17:35 GMT - AFP