* Tropical Storm Hermine moves towards Mexico-Texas border
* Tighter North Sea market boosts Brent relative to WTI
* Coming Up: U.S. employment index for August; 1400 GMT
By Alejandro Barbajosa
SINGAPORE, Sept 7 (Reuters) - Oil extended losses on
Tuesday as the dollar strengthened and Tropical Storm Hermine
showed no signs of disrupting crude or refining output around
the Gulf of Mexico.
U.S. crude for October <CLc1> tumbled as much as 1.2
percent to $73.73 and was down 60 cents at $74 a barrel at 0255
GMT, having extended losses in a three-day session that will
include trades logged on Sunday, Monday and Tuesday because of
the U.S. Labor Day holiday.
The New York Mercantile Exchange, home to West Texas
Intermediate (WTI) crude futures, will issue just one
settlement for those three days.
The euro slid on Tuesday from a three-week peak against the
dollar as worries about the European banking sector re-emerged,
prompting investors to cut risks. The greenback was up 0.4
percent against a basket of currencies. [] <.DXY>
"The U.S. dollar seems to have stopped to decline, but with
the holiday in New York, all markets are going to be very
quiet," said Ken Hasegawa, a commodity derivatives manager at
brokerage Newedge in Japan.
"Crude oil to some extent will have influence from
financial markets, but it is completely stuck in a range from
$70 to $80. It's very comfortable for everyone."
Front-month U.S. crude has for most of this year remained
between $70 and $80, a range that OPEC says is high enough to
foster investment in capacity expansion and low enough to
sustain economic recovery.
A stronger dollar reduces the purchasing power of oil users
outside the United States.
Asian stocks hovered near one-month highs on Tuesday as
investors awaited a flood of Chinese data as early as this
week, which is expected to show continued moderation in
economic growth in August at the world's second-largest
oil-consuming nation. []
ICE Brent for October <LCOc1> added 1 cent from Monday's
close to $76.88, partly because of the de-phase caused by
NYMEX's extended session.
Front-month Brent had gained 14 cents on Monday with demand
improving in the North Sea physical market as refining margins
widen amid expectations that consumption from emerging
economies, led by Asia, will increase for the rest of the year.
HURRICANE ACTIVITY
Tropical Storm Hermine formed early on Monday and was
churning toward landfall, potentially as a hurricane, near the
Mexico-Texas border, according to the U.S. National Hurricane
Center.
"The formation of Tropical Storm Hermine in the southern
Gulf of Mexico highlights how rapidly new threats can appear
now that we are approaching the peak of the hurricane season,"
JP Morgan analysts headed by Lawrence Eagles said in an
e-mailed note.
Still, BP Plc <BP.L><BP.N>, the largest oil producer in
U.S.-regulated areas of the Gulf of Mexico, and Shell Oil Co
<RDSa.L> said late Monday that Hermine was not affecting their
offshore operations. []
Valero Energy Corp <VLO.N> said production at its
315,000-barrel-per-day (bpd) Corpus Christi, Texas, refinery
was at planned levels, but the plant was preparing for possible
rough weather from the storm.
Petroleos Mexicanos, or Pemex, as the Mexican state-run oil
company is known, said there were no reports of damage to
facilities in or near the Gulf of Mexico after Hermine moved
north from the oil-rich Bay of Campeche.
The Gulf is also home to about 30 percent of U.S. oil
production, 11 percent of the country's natural gas output and
more than 43 percent of U.S. refinery capacity.
In the Atlantic, the remnants of Tropical Storm Gaston
continued to move westward and had a high chance of reforming
as a tropical cyclone during the next 48 hours, according to
the NHC. Storm models predicted Gaston would move west towards
Puerto Rico, the Dominican Republic and Haiti, but it was still
too early to determine whether it would enter the Gulf.
(Editing by Manash Goswami)
