UPDATE 5-Oil below $77 as equities drop on debt worries

                                
 * Investors cautious ahead of bank repayments to ECB
                                
 * Alex seen skirting Gulf of Mexico's main oil production
                                
 * For a technical view, click: [ID:nSGE65S00V]
                                
 * Coming Up: U.S. API inventory report at 2030 GMT
 
 (Updates throughout, changes dateline, pvs SINGAPORE)
                                
 By Christopher Johnson
                                
 LONDON, June 29 (Reuters) - Oil prices fell 2 percent to
below $77 per barrel on Tuesday as stock markets slumped and
risk appetite dwindled on renewed worries over euro zone debt.
                                
 Shanghai's main equities index <.SSEC> plunged more than 4
percent, Japan's Nikkei <.N225> was poised for its worst quarter
since October-December 2008 and European stocks lost 1.5 percent
in early trade as the dollar rose against the euro <EUR=>.
                                
 A supportive factor for oil was removed as forecasts
indicated Tropical Storm Alex would skirt the main production
region in the Gulf of Mexico, limiting disruption there to a few
precautionary shutdowns. [ID:nN27206834]
                                
 U.S. crude for August <CLc1> tumbled as much as $2.00 to a
low of $76.25 per barrel before recovering to $76.75, down $1.50
by 1019 GMT, extending Monday's 0.77 percent decline.
                                
 Oil is still up almost a fifth from its intra-day low on May
20 below $65 and is about $10 lower than an early-May 19-month
peak above $87.
                                
 ICE Brent <LCOc1> fell $1.40 to $76.19.
                                
 Investors were cautious ahead of bank repayments to the
European Central Bank. Banks must repay 442 billion euros
($545.5 billion) to the ECB on Thursday, leaving a potential
liquidity shortfall in the financial system of over 100 billion
euros. [ID:nLDE65R0LE]
                                
 The dollar rose 0.5 percent against a basket of currencies
on Tuesday. A stronger dollar makes oil more expensive for many
buyers based in other currencies. <.DXY> [FRX/]
                                
 "It is a return to risk aversion," said Eugen Weinberg, a
commodity analyst at Commerzbank in Frankfurt. "Gold <XAU=> is
outperforming other commodities, a sign of a move to safe
havens, and base metals are down on worries over the economy."
                                
 "The oil market is no longer worried about Tropical Storm
Alex as it looks like it will avoid oil facilities," he said.
                                
 
                                
 ALEX
                                
 The U.S. National Hurricane Center forecast that Alex,
located about 520 miles (835 km) southeast of Brownsville,
Texas, would make landfall near the Texas-Mexico border early
Thursday. [ID:nN28267830]
                                
 Alex, which was moving slowly north-northwest, is expected
to strengthen into the first hurricane of the Atlantic season on
Tuesday, the NHC said in latest advisory on Monday.
                                
 A tropical storm, where the maximum sustained surface wind
speed is 63-118 km per hour (kph) (39-73 mph), is weaker than a
hurricane, where sustained winds are 119 kph or faster.
                                
 Shell <RDSa.L> said it was shutting output from its western
and central Gulf of Mexico assets ahead of Alex. [ID:nWEN6394]