Oil rose above $79 on Monday to its highest level in almost eight weeks while tropical storm Alex forced Mexico to slow oil exports and some producers in the United States to evacuate platforms and curb output.
Japan's Nikkei average fell 0.3 per cent on Monday, with the dollar little changed against a basket of currencies, despite an upbeat sign for the macroeconomic outlook on Friday from US consumer sentiment, which rose in June to its highest since January 2008.
Over the weekend Alex became the first named storm of the Atlantic hurricane season, which runs from June through November and forecasters expect will be an active one, possibly matching the record-breaking 2005 season.
"The first hurricane always heightens concern, and this season is expected to be a bad one," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney. "There is concern that production would be reduced."
US crude for August rose as much as 52 cents to $79.38 a barrel, the highest intra-day price since May 6. A settlement above $79.30 would send prices to a higher range, Barratt said.
The price was up 36 cents at $79.22 by 0257 GMT, after rising 2.2 per cent last week, partly on concern that Alex would veer north and hit US output in the northern part of the gulf. August ICE Brent crude gained 40 cents to $78.52.
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Qatari stocks marginally gained last week with the main index of the bourse looking up 97.13 points, or 0.93 percent, to 10,486.23 yesterday which was the last trading day of the week.