Oil down on cautious US trade, easing storm

Oil prices were lower in Asia today as US stocks stalled in lacklustre trade and concerns eased over the possibility of a tropical storm in the Gulf of Mexico disrupting supplies, analysts said.

           
New York's main contract, light sweet crude for delivery in August, shed 19 cents to $78.06 while London's Brent North Sea crude for August dropped 13 cents to $77.46.

           
Ben Westmore, a Melbourne-based minerals and energy economist with the National Australia Bank, said oil fell after listless trade in US stocks on yesterday.

           
"Overnight, the US equity markets didn't really move much and the markets so far in Asia aren't showing a lot of strength," Westmore told AFP.

           
US stocks closed slightly lower yesterday after consumer spending and income data proved to be mostly in line with expectations and investors awaited a key jobs report.

           
The Dow Jones Industrial Average slipped 5.29 points (0.05%) to finish at 10,138.52.

           
The tech-rich Nasdaq index fell 2.83 points (0.13%) to 2,220.65 and the broad-market S&P 500 index shed 2.19 points (0.20%) at 1,074.57.

           
The US Commerce Department said consumer spending, a key driver of US economic growth, rose 0.2% in May after being flat in April, while personal income rose 0.4%, slowing from a 0.5% increase in the previous month.

           
Westmore also said worries that a tropical storm would disrupt operations in the oil-rich Gulf of Mexico region have waned.

           
"It looks like the storm missed the main oil-producing areas in the Gulf and as a result, some of the strength that's been a factor in moving prices is no longer there," Westmore said.

           
With production on average of 1.7 million barrels of crude oil per day, the Gulf of Mexico accounts for more than 30% of oil output in the US, the world's biggest energy consuming nation.