* Tropical Storm Hermine moves towards Mexico-Texas border
* Dollar index rises, European stocks slip
* Coming Up: U.S. employment index for August; 1400 GMT
(Updates prices, adds quotes)
By Dmitry Zhdannikov and Alex Lawler
LONDON, Sept 7 (Reuters) - Oil fell by over $1 to near $73 a
barrel on Tuesday as the dollar strengthened and Tropical Storm
Hermine showed no signs of disruption to crude or refining
output as it came ashore near the Mexico-Texas border.
The dollar was up 0.6 percent against a basket of currencies
<.DXY>, and Hermine's forecast path kept it away from major oil
and gas installations in the Gulf of Mexico. A stronger dollar
can weigh on oil as it makes crude more expensive for other
currency holders.
"There's a quiet week ahead in terms of fundamental news, so
keep an ear to equities and the dollar," said Stephen Schork of
energy consultants Schork Group, in a report.
U.S. crude <CLc1> fell $1.25 a barrel to $73.35 as at 0933
GMT. Brent crude <LCOc1> was down 77 cents from Monday's close
to $76.10.
The New York Mercantile Exchange (NYMEX), home to U.S. crude
futures also known as WTI, will issue one settlement for trades
from Sunday, Monday and Tuesday because of Monday's Labor Day
holiday.
Paul Harris, head of natural resource risk management at
Bank of Ireland, said volumes were likely to remain light the
day after the U.S. Labor Day holiday and because of a tube
strike in London.
Volumes may pick up closer to the release of U.S. employment
trends data at 1400 GMT. Should data show more negative trends,
the market was still unlikely to fall much deeper, said Harris.
"Just because we are at the peak of the hurricane season ...
the market will be very reluctant to aggressively sell down,"
said Harris, who sees Brent crude in the range of $75-$77.
Brent remained at an atypical premium to U.S. crude as
brimming U.S. inventories weighed on the U.S. benchmark and
because of strong values for Brent-related crudes, such as
Russia's Urals. <CL-LCO1=R>.
European shares slipped on Tuesday, with banks down on
renewed jitters about the health of the sector.
The Atlantic hurricane season runs from June 1 through Nov.
30 and is at its peak period. Traders watch out for storms
because the Gulf is home to about 30 percent of U.S. oil output
and more than 43 percent of refinery capacity.
Tropical Storm Hermine formed early on Monday and made
landfall in northern Mexico near the U.S. border, according to
the U.S. National Hurricane Center.
In the Atlantic, the remnants of Tropical Storm Gaston moved
westward and had a medium chance of reforming as a tropical
cyclone during the next 48 hours, according to the NHC.
(With reporting by Alejandro Barbajosa; Editing by Alison
Birrane and Jane Baird)
