* Oil falls $4 a barrel
* Concern eases about Storm Dolly
(Updates prices, paragraph 4, adds Iraq reports)
By Peter Graff and Alex Lawler
LONDON, July 22 (Reuters) - Oil fell more than $4 a barrel
to a six-week low on Tuesday as a tropical storm moving over the
Gulf of Mexico was expected to miss major oil and gas
installations.
Tropical Storm Dolly, the first big storm threat of 2008,
was still expected to become a hurricane, but was unlikely to
have an impact on crude production in North America.
"Barring a veer north, the risks of an oil price disturbing
event are low," Citi analysts said in a research note.
Oil prices have fallen more than 14 percent over the past 10
days from a July 11 high of more than $147.
U.S. crude futures for August <CLc1> fell $4.78 to $126.26 a
barrel before rebounding slightly to $126.99 by 1410 GMT. London
Brent <LCOc1> was off $3.62 at $128.99.
The storm strengthened slightly on Tuesday as it moved over
the warm waters of the western Gulf of Mexico towards the
Texas-Mexico border, the U.S. National Hurricane Center said in
its latest update.
Concerns Dolly could affect oil production had added $3 a
barrel the previous session and refineries were still keeping a
watch on the weather.
"We have done things like reviewing emergency supplies,
backed up computer programs," said Bill Day, spokesman for
Valero Energy Corp. about preparations at its 142,000 barrels
per day refinery in Corpus Christi.
"No operational items yet, but we are still watching it
closely."
Growing worries over the health of the U.S. economy led last
week to the largest oil price fall ever in dollar terms. In
percentage terms, crude fell by more than 12 percent from the
July 11 high of more than $147.27.
Simon Wardell of Global Insight in London said it was still
not clear whether the price slide had finished after prices
firmed up on Monday and held relatively steady on Tuesday.
"It did fall an awfully long way so some people may be
putting more money in," he said. "It might be a pause, it might
be a part of a rebound."
Oil supplies have grown more comfortable as demand for
gasoline has fallen in the United States in response to high
prices and worries about the economy.
The next set of government data on U.S. oil inventories, for
release on Wednesday, was expected to show crude stocks had
fallen by 500,000 barrels, according to a Reuters poll of
analysts.
Crude stocks unexpectedly rose last week by 3.0 million
barrels, helping to drive oil prices lower. []
The market appeared little effected by reports of a halt of
exports from Iraq's northern fields through Turkey due to a
legal dispute and a delay of several days in Iraqi shipments
from the southern port of Basra due to shipping congestion.
[]
(Additional reporting by Annika Breidthardt in Singapore and
Janet McGurty in New York, editing by William Hardy)
