NEW YORK, Aug 27: Brent crude oil futures reversed early gains to fall toward $112 a barrel on Monday as Tropical Storm Isaac shuttered refineries on the US Gulf Coast, reducing demand for crude.

Traders were also eyeing the possibility of western governments releasing strategic oil reserves to help calm prices, with some analysts suggesting the storm could provide the trigger.

While crude prices fell by as much as $2 a barrel, gasoline and diesel prices both jumped higher due to the threat to refineries on the Gulf Coast, home to almost 45 per cent of refining capacity in the world’s largest oil consumer.

Tropical Storm Isaac churned across the Gulf of Mexico on Monday and began approaching the Louisiana refining hub, prompting US energy companies to start shutting refineries ahead of the storm and raising prospects for a jump in crude oil stocks.—Reuters