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Oil prices fall, but Rita worries linger

NEW YORK -- Crude oil prices eased yesterday after a robust rally a day earlier, but markets worried about possible shortages in oil products as refineries assessed the damage caused by Hurricane Rita.

Light sweet crude for November fell 75 cents to settle at $65.07 a barrel on the New York Mercantile Exchange. It had risen $1.63 Monday.

''The feeling is there's plenty of crude supply in the market, even though we've lost some imports and production," said Tom Bentz, analyst at BNP Paribas Commodity Futures in New York. ''But it's kind of a delicate balance right now. It's hard to say where this market is going."

About a dozen refineries in Texas and Louisiana remained shut yesterday because of Hurricanes Rita and Katrina.

Futures for gasoline extended Monday's gains, rising more than 3 cents to settle at $2.1664 a gallon. Heating oil rose a penny to $2.0686 a gallon. Natural gas rose more than 21 cents to $12.656 per million British thermal units.

Drivers are seeing higher prices at the pump, and analysts say that won't change anytime soon. At an average of $2.81, the US retail price of a gallon of gas is more than 20 cents higher than a month ago, before Hurricane Katrina.

''People are recognizing that gas supplies are going to be tight for a while," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York.

Refineries begin to shift production from gasoline to heating oil at this time of year. But analysts said oil companies will be under pressure to produce enough gasoline to prevent shortages and keep prices from spiking much above $3 a gallon.

The Department of Energy will release its weekly report on oil supply today. Most analysts expect drops in inventories of crude, gasoline, and distillates.

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