LONDON, Sep 25 Oil fell nearly $ 2 to below $ 80 a barrel on Tuesday on continued profit-

LONDON, Sep 25 (Reuters) Oil fell nearly $2 to below $80 a barrel on Tuesday on continued profit-taking from last week's record high, as more output was restored in the Gulf of Mexico following shutdowns triggered last week by a storm.

U.S. crude for November fell $1.80 to $79.15 a barrel by 1345 GMT, adding to Monday's 67-cent loss to bring it nearly $5 below the record $83.90 set by the October contract last Thursday.

London Brent crude shed $1.57 to $77.34 a barrel.

U.S. crude oil production in the Gulf of Mexico rose to 80.7 percent of capacity on Monday, up from 37 percent on Friday, the U.S. Minerals Management Service said, as oil companies redeployed workers to offshore rigs.

''The softening is due to light liquidation of precautionary positions taken out late last week as fears that there could be storm damage to U.S. Gulf oil facilities over the weekend proved unfounded,'' Barclays Capital said in a research note.

But traders kept a wary eye on upcoming storm threats. The U.S. National Hurricane Center said on Tuesday Tropical Storm Karen, the 11th named storm of the 2007 season, had formed in the eastern Atlantic Ocean.

However, while too soon to predict the system's movement with certainty, the storm was not expected to disrupt U.S. oil and gas producing facilities in the Gulf of Mexico.

''In the short term, we believe there's potential for a price correction,'' said Harry Tchilinguirian, senior oil analyst at BNP Paribas, citing heavy refinery maintenance expected next month and a seasonal drop in demand as bearish factors.

''When the risks of hurricanes are also behind us, the sort of correction we had last October -- losing $10 quite easily at the end of the season -- we believe we could have a repeat of that,'' he added.

U.S. INVENTORIES The market is also looking for direction from the U.S.

weekly petroleum stocks data, due on Wednesday.

A Reuters poll of analysts showed U.S. refiners probably slowed imports of crude oil last week, causing inventories to fall by about 2 million barrels, their fifth-straight decline.

Stocks of distillates, including heating oil, were expected to have risen by 1.3 million barrels while gasoline inventories were seen unchanged, the preliminary poll found.

Refiners could have curbed imports for economic reasons too, the poll showed, as prices for future crude deliveries are cheaper than the currently traded month, making it good business sense not to store more feedstock than needed.

The oil rally was forecast to continue next year with average prices seen hitting a record level on the back of tight oil supplies, red-hot global demand and a weakening dollar, a Reuters poll of analysts showed on Tuesday.

Analysts raised their average 2008 oil price forecast for U.S. crude to $66.56 a barrel as many believe the current rally will continue well into 2008. The forecast surpasses the record average of $66.24, reached in 2006.

REUTERS SR ND1946