* Iran says OPEC to support prices at September meet
* Tropical depression forming, limiting price decline
(Updates throughout, changes dateline from LONDON)
NEW YORK, Aug 25 (Reuters) - Oil prices slipped on Monday
as demand worries due to surging fuel costs outweighed supply
concerns caused by a tropical depression in the Caribbean.
U.S. crude <CLc1> fell 34 cents to $114.25 a barrel by 1:22
p.m. EDT (1722 GMT), after falling more than 5.4 percent on
Friday in the largest one-day slide since Dec. 27, 2004. Brent
crude <LCOc1> traded down 31 cents to $113.61 a barrel.
Oil has tumbled from a record high over $147 struck on July
11 on growing signs demand in the United States and other
consumer nations has faltered due to surging fuel costs.
"All the factors that have motivated the price down are
still intact," said James Crandell, analyst for Lehman
Brothers.
"(There are) demand concerns and also increasing supply."
The U.S. National Hurricane Center said an area of low
pressure over the central Caribbean Sea formed into Tropical
Depression Seven and could become the season's latest tropical
storm later Monday. []
According to forecast tracks, two of six forecasters expect
the system to head northwest into the Gulf of Mexico, where
there is a high concentration of U.S. oil and natural gas
production. Four other forecasts show the system headed toward
Belize or the Yucatan Peninsula, however.
Worries over the storm helped counter strength in the
dollar earlier Monday. Investors have used commodities as a
hedge against inflation and the weak dollar this year.
"Judging from the dollar's gains, crude oil should be
down a lot, but that is not the case as a developing storm in
the Carribean Sea appears (to be) supporting oil," said Phil
Flynn of Alaron Trading in Chicago.
Further support on Monday came from ongoing tension between
the West and Russia over Georgia and expectations that oil
exporter group OPEC, which meets on Sept. 9, could trim
production should prices fall further.
Moscow's military intervention in Georgia has disrupted
some shipments of Azeri oil through Georgia.
Russia, which began to pull out the bulk of its forces from
Georgia last week, said on Saturday its troops would patrol one
of Georgia's main Black Sea ports, defying Western demands for
a complete pullback.
Russian lawmakers on Monday urged the Kremlin to recognize
two rebel regions of Georgia, a move seen as likely to worsen
relations with the West. Russia said its troops would patrol
one of Georgia's Black Sea ports, Poti.
Iran's oil minister said on Monday he expected OPEC to work
on preventing the falling trend in crude prices and also to
study oversupply in the market when it meets on Sept. 9 in
Vienna. []
Venezuela said on Friday OPEC should consider cutting oil
production at the meeting if it decides that recent price
declines constitute a sustained downturn.
An OPEC source, however, said, the cartel is likely to keep
oil output policy unchanged. []
The Organization of the Petroleum Exporting Countries, the
source of two in every five barrels of oil, boosted output
further in August, according to industry consultant
Petrologistics on Friday.
(Reporting by Matthew Robinson in New York, Fayen Wong in
Perth and Alex Lawler in London; Editing by Daniel Trotta)
