Oil steady above $78; Alex may skirt U.S. facilities

                                
 * Alex may reach US-Mexico border as hurricane
                                
 * For a technical view, click: [ID:nSGE65S00V]
                                
 * Coming Up: EIA US inventory report; 1430 GMT
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, June 29 (Reuters) - Oil was steady above $78 on
Tuesday, buoyed by forecasts for tropical storm Alex to skirt
the main production region in the U.S. Gulf of Mexico, limiting
disruption there to a few precautionary closures.
                                
 The U.S. National Hurricane Center forecast tropical storm
Alex, located about 520 miles (835 km) southeast of
Brownsville, Texas, would make landfall as a hurricane near the
Texas-Mexico border early Thursday. [ID:nN28267830]
                                
 "The path of the storm looks too soft to cause any major
supply disruption," said Serene Lim, a Singapore-based oil
analyst at ANZ. "All of this has been priced in and there is a
possibility that on confirmation of this there could be further
downside for oil."
                                
 Prices fell on Monday as the negative effect of a stronger
dollar, which makes oil more expensive for Asian and European
buyers, outweighed optimism about a better-than-expected report
on U.S. consumer spending. The euro was under pressure on
Tuesday because of funding concerns about the euro zone.
                                
 U.S. crude for August <CLc1> shed 3 cents to $78.22 a
barrel by 0210 GMT, after falling 0.77 percent on Monday and
rising 21 percent from a May 20 trough below $65. ICE Brent
<LCOc1> rose 2 cents on Tuesday to $77.61.
                                
 Banks must repay 442 billion euros ($545.5 billion) to the
European Central Bank on Thursday, leaving a potential
liquidity shortfall in the financial system of over 100 billion
euros. [ID:nLDE65R0LE]
                                
 "Markets are concerned that European banks are pressed to
pay 442 billion euros. If those worries sustain and the euro
falls, a stronger dollar would pressure oil prices down," ANZ's
Lim said.
                                
 ALEX A HURRICANE?
                                
 Alex, which was moving slowly north-northwest with no
change in wind speed across the Gulf of Mexico, was expected to
strengthen into the first hurricane of the Atlantic season on
Tuesday, the NHC said in latest advisory on Monday.
                                
 Shell Oil Co <RDSa.L> said on Monday it was shutting
production from its western and central Gulf of Mexico assets
ahead of Alex. [ID:nWEN6394]
                                
 For a factbox on preparations for Alex: [ID:nN28268353]
                                
 Two of Mexico's three main oil exporting terminals remained
closed on Monday afternoon as Alex churned north in the Gulf of
Mexico, the government said. The Dos Bocas and Cayo Arcas
ports, which ship more than 1.1 million barrels per day (bpd)
of Mexican crude, were shut on Sunday as the storm approached.
[ID:nN28197154]
                                
 Mexican state-run oil giant Pemex said on Monday its
offshore facilities in the Campeche sound continued to operate
normally despite Alex strengthening in the Gulf of Mexico.
[ID:nN28266348]
                                
 And U.S. oil inventories remain higher than normal,
potentially buffering the impact of weather-related disruptions
on U.S. output.
                                
 Inventories of distillate fuel, a category that includes
heating oil and diesel, probably rose 900,000 barrels last
week, according to a Reuters survey on Monday.
                                
 Crude stockpiles fell by 1.1 million barrels due to a
decline in imports, the preliminary poll showed, while gasoline
supplies may have slipped by 400,000 barrels. [ID:nN28271739]
                                
 Industry group American Petroleum Institute (API) releases
inventory data for the week to June 25 on Tuesday at 2030 GMT,
followed by government statistics from the Energy Information
Administration (EIA) on Wednesday at 1430 GMT.
                                
 Alex delayed some efforts to capture more oil gushing into
the Gulf of Mexico as BP Plc <BP.N><BP.L> and Russia's
government traded words on Monday over the future of the energy
giant's chief executive. [ID:nN2857909]
 (Editing by Clarence Fernandez)