Oil falls on economic woes

A taxi driver re-fuels his taxi at a Shell petrol station in London March 16, 2010.

NEW YORK (Reuters) - Oil prices fell nearly 3 percent on Tuesday as euro zone fiscal problems and downbeat data on the Chinese and U.S. economies made investors more risk averse and fueled concerns about economic growth.

U.S. crude for August fell $2.31, or 2.95 percent, to settle at $75.94 a barrel, having tumbled as low as $75.21.

ICE Brent crude fell $2.15 to settle at $75.44.

Expectations that Tropical Storm Alex will only skirt the Gulf of Mexico's main energy production centers kept pressure on oil prices. Prices hit a seven-week high above $79 a barrel intraday on Monday, before ending lower as the threat eased.

"It is a return to risk aversion," said Eugen Weinberg, a commodity analyst at Commerzbank in Frankfurt. "Gold 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."

Oil declined along with equities and the euro on concerns about whether Europe's banks can repay 442 billion euros ($545.5 billion) to the European Central Bank.

The mood worsened after a report from the industry group the Conference Board showed U.S. consumer confidence fell steeply in June.

Adding to concerns about economic growth and demand for oil, the Conference Board corrected its leading economic index for China to a 0.3 percent gain in April rather than the 1.7 percent rise earlier reported.

The dollar's strength added pressure to the commodities complex. A stronger dollar often weighs on commodity markets, although that correlation has proved erratic this year.

On Tuesday, the Reuters-Jefferies CRB index .CRB, a global commodities benchmark, fell to a two-week low.

ALEX NEARS HURRICANE STRENGTH

The U.S. National Hurricane Center expects Tropical Storm Alex strengthen into the first hurricane of the Atlantic season on Tuesday and to make landfall near the Texas-Mexico border early on Thursday.

Shell (RDSa.L) and other producers did shut several thousand barrels per day of production in the Gulf of Mexico and other companies also removed workers as a precaution.

U.S. oil inventories are above their average levels, potentially buffering the effect of weather-related disruptions as oil traders eye Alex and await weekly inventory reports.

Crude stockpiles likely fell 900,000 barrels last week due to a decline in imports, a Reuters analyst survey forecast ahead of industry American Petroleum Institute data due out on Tuesday at 4:30 p.m. EDT.

Inventories of distillates, including heating oil and diesel fuel, were expected to be up 800,000 barrels, while gasoline stockpiles were forecast to have fallen 500,000 barrels.

(Additional reporting by Gene Ramos in New York, Christopher Johnson in London, and Alejandro Barbajosa in Singapore; Editing by Lisa Shumaker)