LONDON (AFP) - Oil prices slumped beneath 119 dollars a barrel again on Tuesday, as slowing US demand for energy offset tensions over crude-rich Iran, traders said. Crude futures also slid as Tropical storm Edouard was set to cause at worst only small damage to energy installations in the Gulf of Mexico, analysts said. Brent North Sea crude for September delivery dropped 2.14 dollars a barrel to 118.54 dollars in electronic trading. New York's main contract, light sweet crude for September shed 2.01 dollars to 119.40 dollars a barrel. Crude futures were falling "with concerns over slowing demand for energy still dominating investor sentiment," said Andrey Kryuchenkov at the Sucden brokerage in London. On Monday, Brent oil had fallen below 119 dollars for the first time since early May after US economic indicators had emphasised weakness in the world's biggest economy, dealers said. The monthly US Commerce Department survey showed consumer spending, which fuels two-thirds of output, had cooled in June while inflationary pressures accelerated. The United States is the world's biggest user of energy and any signs of slowing consumer spending tends to weigh on global oil demand projections. Elsewhere, tropical storm Edouard lashed the Gulf of Mexico, Texas and Louisiana regions with heavy rain and high winds on Tuesday as it picked up strength and headed from the open waters towards the coastline. Oil companies operating in the region were securing their facilities ahead of the storm, which was expected to make landfall on Tuesday and reach near-hurricane strength. "Edouard is unlikely to do much damage to coastal area refineries," said Kevin Norrish, energy analyst at Barclays Capital. Meanwhile, Iran on Tuesday faced a fresh ultimatum from six global powers to accept an incentives package to freeze sensitive nuclear work or face more UN sanctions. Western warnings of fresh sanctions also appeared as Iran declared that it could block the Strait of Hormuz, the crucial Gulf waterway through which much of the world's oil supplies passes. Tensions over Iran's nuclear programme had surged on Monday after the Islamic republic missed a deadline over the weekend to respond to an international package of incentives aimed at persuading it to freeze uranium enrichment. Iran, the world's fourth biggest producer of crude oil, has refused to suspend uranium enrichment it says is aimed solely at producing fuel for nuclear power production. The United States and its allies fear the programme is a cover for developing nuclear weapons.