NEW YORK (AFP) - World crude oil prices plummeted, dragging New York crude to a seven-week closing low, as fear of a winter heating oil crunch began to evaporate, analysts said.
New York's benchmark light, sweet crude contract for delivery in December slumped 1.72 dollars to close at 47.37 dollars a barrel, the lowest finish since September 21.
Brent North Sea crude for December plunged 2.21 dollars to close at 43.71 dollars.
In the past two weeks, New York light sweet crude has tumbled 14.1 percent, and Brent 15.2 percent.
Relatively mild winter weather in the United States had soothed concerns over US inventories of distillates such as heating oil, said PFC Energy analyst Seth Kleinman.
A weekly snapshot of US crude oil inventories, due Wednesday, was expected to show the stockpiles growing, he said.
The outlook for prices would depend on the weather, Kleinman said.
Each season, there seemed to be a pattern in which a combination of falling inventories and "frantic demand" hit products such as gasoline and heating oil, he said.
"If we have an abnormally warm winter then the United States stands a chance of breaking the pattern," Kleinman said. "But if very have a normal winter that is very cold, we should see new highs for prices."
The fact that the US presidential elections had passed without a terrorist attack also soothed market nerves, said US-based Wachovia analyst Jason Schenker.
Deutsche Bank analyst Adam Sieminski said the market expected crude oil inventories to show a gain as the Gulf of Mexico recovered from damage inflicted by Hurricane Ivan in mid-September.
"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," Sieminski said in London.
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.
Analysts at London-based Barclays Capital said they expected fresh oil price highs in the next months, "particularly should this winter be colder than normal in key northern hemisphere consuming regions."
Traders appeared to ignore events in Iraq, where thousands of US and Iraqi troops poured into Fallujah to retake the Sunni Muslim city from rebels before elections promised in January.
In Egypt, authorities reopened the Suez Canal, which had been forced to shut for the first time in 30 years after a tanker got stuck cross-wise on Sunday.
11/09/2004 - 21:32 GMT - AFP