Crude oil rose after a two week low, after President Barack Obama said that leaders of both parties in the US house and Senate approved a plan to raise the debt ceiling and avert a default by the U.S., which spread optimism over the economic recovery in the world’s largest oil consumer.

Light sweet crude oil opened today at $96.32 a barrel recording the intraday high at $97.26 a barrel and a low of $96.32 a barrel and is currently trading around $97.05 a barrel.

The dollar also surged after the news but currently is trading within a narrow range with a tendency towards the downside as the effect of Obama’s speech began to fade away as the focus will soon be shifted back to the weak US economic fundamentals. The USDIX opened today at 73.83 recording the highest at 74.02 and the lowest at 73.76 and is currently trading flat.

Yesterday, President Barack Obama and Senate leaders said they reached an agreement on a “framework” debt deal that will increase the federal debt ceiling and cut spending, adding that this agreement would lift the cloud of possible default that has dominated global financial markets.

According to congressional officials, it would raise the $14.3 trillion debt ceiling through 2012 by about $2.4 trillion in two steps, and they will cut spending by about $1 trillion and call for enactment of a law shaving another $1.5 trillion from long-term debt by 2021.

Leaders of the Democratic and the Republicans Representatives said they would present the framework on Monday ahead of final votes to approve the deal.

All eyes will now be turned to Congress, which will have to approve the deal before midnight tomorrow in order to prevent default.

U.S. economic growth remains sluggish, meaning a slowing demand in the world's top oil consumer. Last week the Commerce Department said gross domestic product grew at a weaker-than- expected pace at 1.3% in the April-June period, today more fundamentals are expected from the US.

Fluctuation and volatility could dominate financial markets over the upcoming week, and apparently we should expect choppy trading again this week, as the dollar's fluctuations highlighted the past week sessions, the main focus remains on the debt-limit dilemma waiting for the final votes to approve the deal before the August 2 deadline.