Oil rises to 7-wk high as storm forces Mexico to cut exports

                                
 * Alex forces shutdown of Mexican oil terminals
                                
 * Shell, BP evacuate personnel from some U.S. platforms
                                
 * Coming Up: US May personal spending; 1230 GMT
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, June 28 (Reuters) - Oil rose above $79 on Monday
to its highest in almost eight weeks as tropical storm Alex
forced Mexico to reduce oil exports and some producers in the
United States to evacuate platforms and curb output.
                                
 Japan's Nikkei average edged up 0.2 percent on Monday, with
the dollar little changed against a basket of currencies,
though the macroeconomic outlook appeared to brighten after
U.S. consumer sentiment rose in June to its highest since
January 2008, and job loss reports fell. [ID:nN25195328]
                                
 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.
                                
 U.S. crude for August delivery <CLc1> rose as much as 33
cents to $79.19 a barrel, matching the peak on June 25, the
highest intra-day price since May 6.
                                
 It was up 24 cents at $79.10 by 0038 GMT, after rising 2.2
percent last week, partly on concern that Alex would veer north
and hit U.S. output in the northern part of the gulf. August
ICE Brent crude <LCOc1> gained 33 cents to $78.45.
                                
 Mexico closed two of its main Gulf of Mexico oil exporting
terminals on Sunday as tropical, depression Alex moved over the
Yucatan peninsula, the government said.
                                
 The ports of Cayo Arcas and Dos Bocas handle combined
exports of more than 1.1 million barrels per day (bpd), or
about 80 percent of Mexico's shipments abroad, which mainly
head to U.S. refineries. [ID:nN27240392]
                                
 But Mexican state-run oil company Pemex said on Sunday its
platforms in the Campeche sound, which pump almost 2 million
bpd, were working normally, and there was no evacuation plan
yet ahead of the arrival of Alex. [ID:nN27224868]
                                
 Shell Oil <RDSa.L> shut subsea production at its Auger and
Brutus platforms in the Gulf of Mexico because of the threat
from Alex, a website posting said on Sunday. [ID:nN27622581]
                                
 Personnel not essential to operations were evacuated from
BP's Atlantis, Mad Dog and Holstein platforms in the Gulf of
Mexico, a recorded telephone message said.
                                
 Tropical depression Alex moved into the southwestern Gulf
of Mexico and was likely to regain storm status on Monday, the
U.S. National Hurricane Center said, heading towards the
Mexican state of Tamaulipas, which borders the U.S., as a
hurricane. [ID:nN27206834]
                                
 Large patches of thick oil from BP Plc's <BP.L> <BP.N> Gulf
of Mexico oil spill washed ashore in Mississippi for the first
time on Sunday, although Alex wasn't expected to interfere with
clean-up operations. [ID:nN26212440]
                                
 OPEC secretary general Abdullah al-Badri said on Sunday
that he was comfortable with oil prices at their current level
and did not expect production levels to change between now and
October. [ID:nLDE65Q0I8]
                                
 World leaders agreed on Sunday to take different paths for
cutting budget deficits and making their banking systems safer,
a reflection of the fragile economic recovery in many
countries. [ID:nN26228300]
                                
 "A balance has to be found that doesn't affect growth,"
Barratt said. "The perceived feeling is that controlling
deficits will restrain growth. Then oil demand growth won't be
as big as we were expecting."
                                
 Last Friday, U.S. lawmakers hammered out a historic
overhaul of financial regulations, handing President Barack
Obama a major domestic policy victory. [ID:nN25206239]
[ID:nN25341158]
                                
 Dozens of House Democrats had threatened to vote against a
ban on swaps trading on grounds the trade would move overseas.
                                
 Instead a compromise solution allows banks to stay involved
in foreign-exchange and interest-rate swaps dealing, which form
the bulk of the $615 trillion over-the-counter derivatives
market. They also could participate in gold and silver swaps
and derivatives designed to hedge banks' own risk.
                                
 But they would need to spin off dealing operations that
handle agricultural, energy and metal swaps, equity swaps and
uncleared credit default swaps.
 (Editing by Clarence Fernandez)