September crude oil traded higher during the early morning hours, helped by weakness in the US dollar. Some traders indicated that September crude oil has been able to look beyond weaker than expected German consumer sentiment overnight, as well as discounting the threat of a US default on expectations that a deal will be reached prior to the August 2nd deadline. However, failure for the US to reach a deal on the debt ceiling poses a threat to crude oil demand, as it represents a situation that could slow economic growth and push the US back into a recession. This week's inventory data is expected to show the 8th consecutive weekly decline in crude inventories, falling this time by 1.5 to 1.75 million barrels.
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