Oil markets slipped today because of supply concerns in the Gulf of Mexico, as Tropical Storm Isaac threatened to turn into a hurricane.

The US National Hurricane Center warned that the storm could hit towns and cities in at least three states and flood the northern Gulf coast with a storm surge of up to 12 feet.

Brent crude fell by one cent to $112.25 a barrel while US crude fell 11 cents to $95.36 as crude production dropped by 78% in the world’s largest oil consumer.

Investors anticipate release of strategic oil reserves by the US Government to curb the rise in prices.

Markets are also awaiting the result of the impending meeting of Federal Reserve officials in Wyoming, US, and the European Central Bank’s policy meeting on 6 September, reports Reuters.