Crude oil prices in the US tumbled to five-month low and stocks rallied on early Tuesday as Hurricane Gustav spared the oil rigs along the Gulf of Mexico. However at the end of the trading session, stocks slipped down amid concerns that OPEC was headed for a cut in production at its meeting next week.

The first trading day of this month saw the Dow Jones Industrial Average rallying almost 250 points but it eventually lost 26.3 points or 0.2% to settle at 11,516.92.

The stock market’s initial rally was stimulated by a sharp fall in crude oil futures for October delivery which dropped by $5.75 to close at $109.71 a barrel on the New York Mercantile Exchange. This was the result of Hurricane Gustav passing over the Gulf of Mexico without causing much damage to the oil installations as had been initially feared.

However the stock rally eventually fizzled out as the energy sector pulled down the overall market amid speculations that OPEC was planning to restrict oil production at its upcoming meet on September 9. Some of the sectors which declined on the S&P included energy, materials and utilities while the gains were led by the consumer discretionary sector.