Oil rose on Monday as Tropical Storm Gustav formed in the Caribbean, stirring concerns that it could disrupt oil and natural gas output in the Gulf of Mexico as it moves northwest.
Gustav, the seventh tropical storm in the Caribbean this season, was expected to strengthen and bring hurricane conditions to parts of the Dominican Republic and Haiti by Tuesday.
US crude settled up US52 cents at $US115.11 a barrel after falling more than 5.4% on Friday in the largest one-day slide since 27 December, 2004. Brent crude gained US11c to settle at $US114.03 a barrel.
Two of seven forecast tracks show the storm heading toward the Gulf of Mexico, where the United States has a high concentration of oil and natural gas production. Four show it heading toward Guatemala, Belize or the Yucatan Peninsula.