Oil prices rise after slump to $46

Oil prices rose slightly Tuesday on bargain-hunting, having slumped to near four-year lows at 46 dollars earlier in the day on concerns over weak energy demand.

Brent North Sea crude for delivery in January hit 46.02 dollars -- the lowest point since February 18, 2005 -- but then recovered to 48.50 dollars a barrel, up 53 cents from the close Monday when the contract had plunged 5.52 dollars.

Oil prices fell sharply on Monday after OPEC decided at a weekend meeting against cutting production, preferring to wait until December before reducing crude exports. The cartel's secretary general Abdalla Salem El-Badri said on Monday that OPEC would decide on a "major" output cut next month if the oil market were deemed to be deteriorating.

"OPEC's attempt to talk prices up by announcing a production cut for the regular summit on December 17 in Algeria and by stating that 75 dollars a barrel would be a fair price, has failed miserably," said Dresdner Kleinwort analyst Peter Fertig.

The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's crude, met in Cairo on Saturday to assess the state of the oil market but held off from making any decision on cutting production. Instead, energy ministers decided that any output move would be made when they next meet in Oran, Algeria on December 17.

OPEC has already slashed output twice this year by a total of two million barrels per day (bpd) in response to plunging prices but fears remain that a global recession will undercut demand for energy. The OPEC production cuts agreed in September and October failed to stop prices sliding under 50 dollars earlier this month as concern mounted about a global recession.

Prices are now down by more than 60 percent from record highs above 147 dollars in July.