Forexpros – Crude oil futures were up for a second day on Wednesday, hovering close to a one-week high amid signs of progress on lifting the U.S. debt ceiling and as concerns over a slowdown in U.S. demand eased.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD98.81 a barrel during European morning trade, gaining 0.8%.         

It earlier rose as much as 0.9% to trade at a daily high of USD98.94 a barrel, just below Monday’s one-week high of USD98.96 a barrel.

U.S. President Barack Obama said Tuesday there had been “some progress” in talks with lawmakers on raising the USD14.3 trillion U.S. debt limit after endorsing a USD3.7 trillion debt-reduction plan by a bipartisan group of Senators.

President Obama said the proposed plan was “a very significant step,” boosting optimism that a deal would be reached before the August 2 deadline.

Meanwhile, data released by the American Petroleum Institute on Tuesday showed that U.S. crude supplies fell by 5.2 million barrels last week, the biggest decline in six weeks and significantly higher than the expected 1.7 million barrel drop.

The U.S. Energy Department was to release its closely-watched crude oil inventories report for the week ended July 15 later in the day.

The data was expected to show that U.S. crude oil stockpiles declined by 1.5 million barrels, while gasoline supplies were forecast to fall by 0.1 million barrels. 

U.S. oil supplies have declined in each of the past six weeks, falling nearly 5% since the end of May amid U.S. peak gasoline demand.

Weakness in the dollar had also contributed to oil’s strength. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.33% to trade at 75.25, hovering close to a one-week low.

Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery added 0.7% to trade at USD118.10 a barrel, up USD19.29 on its U.S. counterpart.