Prices of oil slip on storm worries

NEW YORK -- Oil prices fell yesterday after an early rally in jittery trading due to hurricane speculation and light volume.

''The driving force on the market today, if there is any, is the track of the storm Ivan," said Phil Flynn, senior market analyst at Alaron Trading Corp. in Chicago.

Ivan will probably reach the Gulf of Mexico Sunday or Monday, the National Hurricane Center in Miami said. The gulf is where the United States has its largest concentration of refineries.

On the New York Mercantile Exchange, light crude set for October delivery fell 54 cents to settle at $42.77 a barrel after rising as high as $43.70 earlier in the day.

Flynn said both the early rally and the subsequent drop in prices were due to uncertainty about Hurricane Ivan.

In response to Ivan, Valero Energy Corp. began a full shutdown yesterday of its 225,000-barrels-a-day Aruba refinery. But, weather permitting, Valero plans to restart operations today.

In other Nymex trading, October gasoline rose 0.25 cent to settle at $1.1817 a gallon, while October heating oil fell 0.24 cent to $1.1612 a gallon. October natural gas fell 15.9 cents to $4.631 per 1,000 cubic feet. On London's exchange, Brent crude futures fell 37 cents to $40.39 a barrel.