LONDON - Oil prices tumbled to six-month lows below $97 on Thursday as the dollar rallied and the likelihood of a global economic slowdown loomed over demand growth.

Prices had risen earlier in the day as Hurricane Ike headed toward key energy facilities on the southern US coast and after OPEC on Wednesday reduced output to curb falling prices.

Brent North Sea crude for delivery in October dropped to $96.99 a barrel on Thursday - ts lowest level since March 5. It later recovered to $97.37, down $1.67 from Wednesday's close. New York's main contract, light sweet crude for October, slid $1.96 to $100.62.

"Crude oil futures slipped further ... as the market focused on demand concerns and the strengthening dollar," said Sucden analyst Michael Davies.

A strong dollar makes goods priced in the US unit, such as oil, more expensive for foreign buyers, dampening demand. The euro on Thursday slid below $1.39 for the first time in a year on heightened concerns about a weak European economy.

Concerns about oil use in a slowing global economy were highlighted by the latest monthly report from the International Energy Agency (IEA), which cut its estimate for demand growth this year by 100,000 barrels per day and for 2009 by 140,000 bpd. The report, published Wednesday, highlighted shrinking oil demand in North America, saying consumers there were cutting back energy use.

The same day, the US Department of Energy said that stockpiles of distillates had dropped by 1.2 million barrels in the week ended September 5. The consensus forecast was for a bigger decline. - AFP