Adds analyst comment, updates with official prices

LONDON, June 4 (Reuters) - Copper traded higher on Thursday, reversing an early price dip as dwindling inventories offset investor concerns that a prolonged conflict in the Middle East could curb demand growth.

Benchmark three-month copper CMCU3 on the London Metal Exchange was up 0.5% at $13,895 a metric ton in official open outcry activity, edging back towards the $14,000 mark it crossed earlier this week.

The metal slipped as much as 0.9% earlier in the day on uncertainty over progress in talks to end the Iran war.

Prices turned higher after LME data showed orders to withdraw another 23,475 tons of copper from LME warehouses, including 18,975 tons from New Orleans.

The arbitrage to ship metal from the LME to the U.S. COMEX exchange is wide open, so it makes sense to cancel stock held on the LME, a trader said.

LME copper inventories MCUSTX-TOTAL fell to 379,975 tons on Wednesday, the lowest since April 2, and only 240,650 tons, or just under two-thirds, are available to the market.

ING analyst Ewa Manthey said copper prices had eased from recent highs as U.S.-Iran tensions could weigh on the demand outlook.

"The move is being driven by a combination of weaker growth expectations, higher energy costs and profit-taking after a tariff-driven rally," she added, referring to the prospect of the U.S. imposing a duty on refined copper imports.

The U.S. Department of Commerce is due to make a recommendation to President Donald Trump on copper tariffs by the end of the month.

"If cathode tariffs do take effect, we should see the current arbitrage move up significantly, but an additional postponement could see domestic prices, premiums and the arb come under significant pressure instead," wrote Marex consultant Ed Meir.

The rest of the LME complex was trading lower. Aluminium CMAL3 dipped 1.1% to $3,662 a ton, tin CMSN3 shed 2.4% to $56,050, zinc CMZN3 slid 0.8% to $3,583, lead CMPB3 lost 0.3% to $2,016.50 and nickel CMNI3 fell 1.4% to $18,600, touching its lowest since May 19.