Gulf equities climbed higher on Monday, as investors appeared to shrug off the drop in oil prices amid China's fresh COVID-19 restrictions and potential rate hikes by the U.S. Federal Reserve.

Oil prices, a key driver for financial markets in the Middle East, fell on Monday with the global fuel demand outlook overshadowed by COVID-19 restrictions in China and the potential for further interest rate hikes in the United States and Europe.

Oil prices dropped $1.01, or 1.1%, to $91.83 a barrel by 0630 GMT, after settling 4.1% higher on Friday.

The Abu Dhabi index moved up 0.8%, extending the rally for four consecutive sessions, led by a 1.1% hike in country's largest lender, First Abu Dhabi Bank and a 4% surge in investment firm Multiply Group.

In Dubai, the main share index inched up 0.3%, supported by financial and real estate stocks. Dubai's largest lender Emirates NBD Bank advanced 1.6% while blue-chip developer Emaar Properties was up 2.9%.

The United Arab Emirates' tourism revenues were 19 billion dirhams ($5.17 billion) in the first half of 2022, its vice president said on Sunday in a tweet.

The quick vaccination roll-out in the emirates and easing of pandemic restrictions faster than most cities around the world allowed it to bounce back quickly from the pandemic, enjoying a sharp uptick in visitors as Dubai hosted the Expo world fair from last October to March.

In Qatar, the benchmark index, was up 0.3%, led by gains in telecoms and financial stocks, with Ooredoo advancing 2.4% and sharia lender Masraf Al Rayan climbing 0.6%.

Saudi Arabia's benchmark index edged 0.1% higher, as losses in materials shares were capped by gains in financial companies. Al Rajhi Bank rose 0.4%, while chemical manufacturing company Saudi Basic Industries Corporation - SABIC was down 2.2%.

Oil giant Saudi Aramco was trading flat.

(Reporting by Shamsuddin Mohd in Bengaluru; Editing by Sherry Jacob-Phillips)