* Tropical Storm Alex path seen less threat to oil output
* U.S. consumer spending, incomes rise in May supports oil
* Coming up: API oil inventory data on Tuesday
(Updates with settlement prices, market activity)
NEW YORK, June 28 (Reuters) - Oil prices slipped from a
seven-week high on Monday as Tropical Storm Alex's threat to
Gulf of Mexico energy production was perceived to be lower.
A stronger dollar also helped pressure oil prices and
counter support from a report showing U.S. consumer spending
rose more than expected in May.
"The consumer spending rise was good but the stronger
dollar and a little less concern about the storm were why crude
finished lower," said Chris Dillman, analyst at Tradition
Energy in Stamford, Connecticut.
U.S. crude for August <CLc1> fell 61 cents, or 0.77
percent, to settle at $78.25 a barrel, trading as low as $77.72
and as high as $79.38, the highest intraday price since May 6.
August Brent crude <LCOc1> fell 53 cents to settle at
$77.59 a barrel.
Over the weekend, Tropical Storm Alex became the first
named storm of the 2010 Atlantic hurricane season.
The U.S. National Hurricane Center said on Monday that Alex
was expected to become a hurricane on Tuesday and to hit near
the Texas-Mexico border early Thursday. []
Most weather models project a north-of-the-border hit, but
the models were still shifting. Earlier Monday, most models
forecast the storm would hit south of the border.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Take a Look on hurricane season []
Factbox on Gulf of Mexico operations []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
STORM DISRUPTS SOME SUPPLY
While concern over the weather threat eased, it did cause
some disruption to supplies.
Mexico closed two of its main Gulf of Mexico oil exporting
terminals on Sunday as Alex moved over the Yucatan peninsula,
the government said. []
Shell Oil <RDSa.L> said it was shutting output from its
western and central Gulf of Mexico assets ahead of the storm.
Other companies also began evacuating some offshore workers as
a precaution.
"The market is oversupplied. Given the high level of
stockpiles, any supply disruptions could be met easily as long
as they are short-lived," said Carsten Fritsch, an analyst at
Commerzbank.
OPEC Secretary General Abdullah al-Badri on Sunday put the
"inventory overhang" and oil held in storage on tankers at
about 244 million barrels -- equal to almost three days of
global oil demand. []
Ahead of the week's oil inventory reports from industry and
government, a Reuters preliminary survey of analysts on Monday
forecast crude stocks to have fallen last week. []
U.S. crude oil, gasoline and distillate inventories were at
premiums to year-ago levels, according to EIA data for the week
to June 18.
CONSUMER SPENDING RISE
U.S. consumer spending rose slightly more than expected in
May, a sign of continuing economic recovery, which should
eventually boost demand for oil. []
But traders remain cautious about global economic recovery
as the June payrolls report's Friday release loomed.
The euro fell broadly as potential funding tensions in
Europe this week weighed on the single currency. The dollar
index <.DXY>, measuring the greenback's strength against a
basket of currencies, strengthened.
A stronger dollar can pressure oil prices, both by making
the dollar-denominated commodity more expensive to consumers
using other currencies and by moving money out of energy
markets and into foreign exchange markets.
(Additional reporting by Gene Ramos in New York, Alex Lawler
in London and Alejandro Barbajosa in Singapore; Editing by Lisa
Shumaker)
