U. S. crude oil futures rose more than 1 percent on Monday, on jitters over Iran's latest test-firing of missiles and as Wall Street rallied on stepped up mergers and acquisition activity. NYMEX October natural gas futures tumbled sharply midday Monday, with the expiring front month contract dragged lower by a steeply discounted cash market.

Qatar, one of OPEC's smallest producers, has notified at least three Asian term buyers that it will supply crude oil at full contracted volumes for November, unchanged from October levels, sources said.

U. S. crude stocks rose 500,000 barrels last week, a preliminary poll of analysts showed ahead of weekly inventory reports.

Iran test-fired missiles on Monday, flexing military muscle ahead of this week's talks with major powers concerned about Tehran's nuclear programme.

The U. S. Coast Guard said Monday that a small stretch of the Houston Ship Channel remained closed due to an oil spill, but the region's oil supplies and refinery operations were not affected by the closure.

Demand for crude oil has yet to recover substantially from the economic crisis, the head of the International Energy Agency
(IEA) said on Monday, but lack of investment could lead to a supply crunch in the medium term.

Today the focus would be on crude oil inventory report by API and U. S. Consumer confidence report. Any strength in these numbers may trigger some fresh buying in crude oil.