Rising oil prices weighed on stock markets March 7 as the violence in Libya escalated, while a major ratings agency warned Greece may default on its debts.

Investor sentiment has in recent weeks been dented by the clashes in Libya, where rebels looked to regroup after forces loyal to longtime leader Moammar Gadhafi appeared to be clawing back ground.

The main market impact has been in the oil markets. Under normal circumstances, Libya produces about 1.6 million barrels of crude per day, but its output has been heavily affected by the violence. The country also has the biggest proven oil reserves in Africa.

Investors are also concerned that political upheaval could intensify in the Middle East, where Iran, Iraq, the United Arab Emirates, Kuwait, Bahrain, Qatar, Oman and Saudi Arabia have more than 60 percent of the world's oil reserves.

By late morning, the price of a barrel of crude as traded on the New York Mercantile Exchange was up $1.77 at $106.19 while the equivalent Brent rate in London spiked $2.15 a barrel to $118.11, The Associated Press reports.