Oil falls below $78 as hurricane fears ease

SINGAPORE — Oil prices fell below $78 a barrel Tuesday in Asia on signs Tropical Storm Alex would likely miss most of the rigs in the Gulf of Mexico, leaving supplies undisrupted. Benchmark crude for August delivery was down 53 cents to $77.72 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 61 cents to settle at $78.25 on Monday. Alex gained strength and appeared on track to become a hurricane Tuesday before it makes landfall very near the Mexico-U.S. border sometime late Wednesday, said the US National Hurricane Center in Miami, Florida. The tropical storm's center wasn't expected to approach BP's massive oil spill off Louisiana's coast or the other major crude installations in the area, the center said. Crude prices jumped late last week on expectations Alex could disrupt Gulf oil supplies. "On Friday, the storm was something of a blank canvas with nothing on it, and traders were quick to project their worst fears," Cameron Hanover said in a report. "But, by Monday, it was clear that this first storm of the 2010 Atlantic hurricane season was not going to be a major threat to the oil industry." Most Asian stock markets fell Tuesday, also undermining overall investor confidence. In other Nymex trading in July contracts, heating oil fell 0.63 cent to $2.0870 a gallon, gasoline dropped 0.91 cent to $2.1285 a gallon and natural gas was steady at $4.735 per 1,000 cubic feet. Brent crude was down 39 cents to $77.20 a barrel on the ICE futures exchange. — AP