SINGAPORE (Commodity Online) : Global oil prices remained below $79 a barrel in Asian trade Tuesday despite expectations of an inventory decline in the US, world’s largest energy consumer.

Light sweet crude for September delivery was seen trading at $78.97 a barrel at 11.30 a.m Singapore time while Brent crude was seen at $77.61 a barrel in London.

Analysts said the black gold remained highly volatile as a possible drop in US crude inventories was checked when concerns over a storm threat to drilling in the Gulf of Mexico eased.

American Petroleum Institute will publish data on U.S. inventories Tuesday, followed by government statistics from the Energy Information Administration on Wednesday.

On Monday, oil ended unchanged as stronger U.S. home sales led to economic optimism, while some oil output was restored in the Gulf of Mexico after Tropical Storm Bonnie fizzled out.

New York's main contract, light sweet crude for delivery in September, ended unchanged at $78.98 a barrel. London's Brent crude for September gained five cents to $77.50.

New York oil rallied close to $80 dollars on Friday as Bonnie swirled towards the Gulf of Mexico but then pulled back after stress test results on Europe's banks were released.

Scepticism over European banking-sector stress tests, which cleared all but seven European lenders, got a subdued welcome on stock markets on Monday.

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