New York's main contract, light sweet crude for delivery in October rose by 11 cents to 63.45 dollars per barrel in early deals. In London, the price of Brent North Sea crude for October delivery dipped 10 cents to 61.70 dollars per barrel.

Prices have fallen by about 10 percent since striking record high points of 70.85 dollars in New York and 68.89 dollars in London on August 30 -- a day after Hurricane Katrina battered US oil facilities in the Gulf of Mexico.

Oil prices in London were "extending losses from late last week as concern mounted that the high prices are starting to... sap demand", Sucden analyst Sam Tilley said.

"Overall, we are more worried about demand being affected by the high price of oil," he added.

The International Energy Agency last Friday said that demand strains on the world oil market may be abating.

"The world needed to cut back on consumption... I think Katrina gave us a psychological shock to the system," Tony Nunan, manager for energy risk management with Mitsubishi Corp said on Tuesday.

Despite cooling however, the current level of prices still concerned political leaders.

British finance minister Gordon Brown urged "concerted global action... to bring down world oil prices and stabilise the market for the long term".

Addressing the annual conference of the Trades Union Congress (TUC), Britain's main labour federation, the Chancellor of the Exchequer Brown added: "Lack of transparency about the world's reserves and plans for their development undermines stability and causes speculation. The world must call on OPEC to become more open and more transparent."

The Organisation of Petroleum Exporting Countries was to meet in Vienna next Monday and Tuesday to discuss output policy.

Meanwhile French President Jacques Chirac pressed oil companies to commit themselves to lowering gasoline (petrol) prices at the pump.

Chirac at a cabinet meeting asked oil companies "to show strong support for the indispensable movement toward lower prices at the pump", according to government spokesman Jean-Francois Cope.

related report
Firms assess damage after Katrina's fury
By Andrea R. Mihailescu, UPI Energy Correspondent
Washington (UPI) Sep 13 - Katrina's impact on the oil and gas industry is more severe than that of her predecessor -- Hurricane Ivan in 2004.

Because of damage to production facilities, pipelines and other energy infrastructure, more than 898,000 barrels of oil and some 3.93 billion cubic feet of natural gas from federal offshore waters still could not move to market last Friday, the Minerals Management Service said.

This was a marginal improvement from Thursday's figures.

"So some portion of 4 billion cubic feet per day is permanently lost," Pickering Energy analyst Dan Pickering said.

Shell Oil, the U.S. affiliate of Royal Dutch/Shell, reported serious damage to its production facilities in the Mars, Ursa, Mensa and Cognacareas, which may prevent restoration of production until next year, the company reported.

Pipelines and onshore processing and handling operations continue to be damaged.

Prior to Katrina, Shell's net Gulf of Mexico production averaged some 450,000 barrels of oil equivalent per day. But as of Friday, volume stood at 160,000 barrels of oil equivalent per day.

The Dynegy's gas processing plant at Venice, La., is cover with mud, slime and muck even as waters recede, aerial photos show.

ConocoPhillips is still assessing how to house employees and contractors needed to restore its refinery at Belle Chase, La.

Other oil and gas companies face similar challenges following Katrina's aftermath.

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