NEW YORK?Oil prices fell on Monday as tropical storm Alex appeared on course to spare energy platforms in the Gulf of Mexico, easing supply concerns that have underpinned prices.

New York's main contract, light sweet crude for delivery in August, closed at $78.25 a barrel, down 61 cents from Friday.

London's Brent North Sea crude for August slid 53 cents to settle at $77.59.

The market kept a watchful eye on Alex, the first major storm of the Atlantic hurricane season, as it entered the Gulf of Mexico.

"Tropical storm Alex most likely won't be much of a problem for BP as its track is far south of the spill zone. Now let's just hope that another storm does not develop," said Phil Flynn at PFG Best.

With production on average of 1.7 million barrels of crude oil per day, the Gulf of Mexico accounts for more than 30 percent of oil output in the US, the world's biggest energy-consuming nation.

Oil prices had jumped last week as the market fretted about the potential impact of Alex on global energy supplies and the disaster operations involved in the massive BP oil spill, pushing the New York contract $2.35 higher on Friday.

"Prices rose steadily at the end of the week after Alex, the first storm of the 2010 season, was brewing," said analyst Christophe Barret at Credit Agricole CIB.

"While the impact of the storm appears limited, it did act as a reminder of potential severe disruptions to come over the hurricane season."

Oil companies Shell and ExxonMobil said on Monday they had evacuated staff from their Gulf platforms as a precaution.

Shell has evacuated 700 people, nearly half of its staff working on platforms in the area, while ExxonMobil removed non-essential personnel.

Chevron said it was monitoring the situation and stressed its production had not been affected.

According to the US weather authorities, Alex was expected to develop into a hurricane on Tuesday.

Oil prices also were pressured by a rise in the dollar against the euro, said Jason Schenker of Prestige Economics.

The stronger US unit makes dollar-priced oil more expensive for buyers using the currency shared by 16 European nations.

The head of the Organization of Petroleum Exporting Countries, Secretary General Abdalla Salem El-Badri, said over the weekend that oil prices were "comfortable" and the cartel had no plans to change its production strategy.

On Monday the OPEC chief urged the United States to ditch a six-month freeze on deep-water drilling slapped on the oil industry in the wake of the Gulf of Mexico disaster.

"We should not really ban it and we should not jump to conclusions without serious study," he said after meeting with European Union energy chiefs in Brussels.

He said the oil industry was re-examining its methods after an April 20 explosion at a BP-leased deepwater rig off the coast of Louisiana killed 11 workers and caused the worst oil spill in US history.

BP pegged the spill's cost to the company as of Monday at 2.65 billion dollars.