Oil falls as Gulf storm worries ease

NEW YORK (CNNMoney.com) - Oil prices fell Tuesday, closing at the lowest point since June 5, as a perceived decline in U.S. demand took hold again and worries subsided that a storm would disrupt production in the Gulf of Mexico.

Light, sweet crude for August delivery fell $3.09 to settle at $127.95 a barrel in afternoon trading on the New York Mercantile Exchange.  Oil was down as much as $5.41 earlier in the session, but rallied near the end of the session.

–By CNNMoney.com's Kenneth Musante and David Goldman