However, prices are expected to resume their uptrend as demand peaks during the northern hemisphere winter season, with concerns over possible supply disruptions stoking price volatility, they said.

At 3:55 pm (0755 GMT), light sweet crude for December delivery was trading at 48.65 dollars a barrel, down 17 cents from its settlement of 48.82 dollars in New York on Thursday.

The US Energy Department reported Wednesday that crude oil inventories rose 6.3 million barrels to 289.7 million barrels in the week to October 29 but the report's calming effect on the market is expected to be limited.

Prices rose after President George W. Bush won re-election on fears that four more years of the incumbent would lead to further tensions in the volatile oil-producing Middle East.

Some analysts, however, said the reaction to the Bush victory was overdone and the market is now pausing for its next lead.

Other analysts also pointed to a fall in US stockpiles of distillates -- mostly crucial heating oil and diesel -- as a reason for oil prices to remain volatile.

Distillates dropped 900,000 barrels to 115.7 million, below the average range for this time of year.

"After further review (of the US Energy Department report), it became abundantly clear it wouldn't be such smooth sailing for (those betting on lower prices) after all," said Phil Flynn, an energy analyst with Alaron Trading Corp. in the United States.

"The distillate category was the issue of concern as we are one week closer to winter and we're not building supply," he said in a market analysis posted on the company's website.

Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo, said oil prices traditionally go on a downward cycle from end-October to mid-November.

"People want to wait and see what happens in the winter so they don't want to keep long positions," he said.

Emori said 48 dollars a barrel is a critical support level, which if breached could see prices falling further in the short term.

However, he said the 48-dollar level is likely to hold and that he still projects prices to soar to 63 dollars by end December or early January due to a combination of factors, including higher demand for winter heating oil.

He also noted that despite the increase in US crude oil inventories, current levels are still lower compared with the past five years.