Oil fell toward $48 a barrel on Tuesday after data showed U.S. house prices plunged in January, indicating the depth of the recession in the world's top energy consumer. The oil market also slipped before the release of U.S. inventory data expected to show an increase in crude oil stockpiles that have already swelled to their highest since 1993. "Nothing has changed in the near-term fundamentals. We still have a deep recession, sharply contracting demand and high stocks, " said Mike Wittner, oil analyst at Societe Generale. U.S. crude slipped 27 cents to $48.14 a barrel by 10:48 a.m. EDT, having earlier climbed more than $1 to as high as $49.94. London Brent crude was off 14 cents to $47.85. Prices of U.S. single-family homes plunged a record 19.0 percent from a year earlier in January. Another report showed business activity in the Midwest shrank in March at the most severe rate since 1980. Earlier in the session, oil gained a lift from rising stock markets in Europe and Asia and a weaker dollar, which can increase the appeal of oil and commodities to some investors. Oil is still heading for a quarterly gain and has rallied more than 7 percent in March, prompting by rising stock markets and lower oil supplies as the Organization of the Petroleum Exporting Countries cuts production. The price is still down nearly $100 from the record high reached last year because the global economic crisis has eroded oil demand. Worldwide, demand is expected to contract in 2009 for a second consecutive year. Further evidence of weakening demand came from Japan, the world's third-largest energy consumer, where crude oil imports in February fell 3.3 percent from a year ago. The next major indication on oil demand will come from U.S. weekly data which will probably show crude stocks rose for a fourth straight week, according to a preliminary Reuters poll. Industry group the American Petroleum Institute releases its report on Tuesday at 4:30 p.m. EDT and the Energy Information Administration issues its data on Wednesday.

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