* Obama gives congressional leaders weekend deadline for
* Dollar/euro rangebound ahead of bank stress test in Europe
* Citigroup Q2 earnings beat forecast, U.S. consumer price
By Claire Milhench and Ikuko Kurahone
LONDON, July 15 Oil edged higher from earlier
losses in choppy trading on Friday as the market focus shifted
to the potential for a weaker dollar amid concerns about the
U.S. budget negotiations to avert a debt default.
U.S. crude CLc1 leading the oil complex, up 92 cents at
$96.61 a barrel by 1341 GMT. Brent crude LCOc1 was up 79 cents
at $117.05 a barrel.
"The dollar. It is all about the U.S. debt ceiling. If they
do not do a deal, then Moody's will downgrade U.S. debt," a New
York-based trader said.
President Barack Obama suspended U.S. budget negotiations
for the day Friday to give congressional leaders a chance to
come up with a "plan of action" on how to unblock talks meant to
cut deficits and avert a debt default. The talks may resume over
Obama, who had vowed to meet top lawmakers every day until
a deal is reached to raise the U.S. debt limit, gave top
Democrats and Republicans until Saturday morning to reconsider
their positions in the high-stakes negotiations.
He will hold a news conference Friday at 11:00 a.m. EDT
Earlier this week, Moody's Investors Service warned for
potential downgrade of the U.S. debt.
Standard & Poor's chimed in on Friday, warning that there
was a one-in-two chance it could cut the prized triple-A rating
within the next 90 days if a deal to raise the government's debt
ceiling is not struck by the White House and Republicans.
The dollar-euro traded mostly in a range on Friday as
investors in Europe awaited the results of stress tests for 90
banks due at 1600 GMT, which could force some to seek state
LOWER EARLIER IN THE DAY
Earlier on Friday when European traders were a majority of
the players in the oil market, the same U.S. debt woe drove oil
prices lower, being interpreted as a threat to the global
economy. The United States is the world's largest economy and
the euro zone has already been hit by spate of downgrades.
"It is overall economic concerns that are driving the oil
price this morning," said Eugen Weinberg, a senior commodity
analyst at Commerzbank in Frankfurt.
Support to U.S crude also came from Citigroup, which
reported a 24 percent jump in its second-quarter profit, beating
U.S. consumer prices fell slightly more than expected in
June to post their biggest drop in a year on weak gasoline
costs, government data showed on Friday, pointing to a cooling
in commodity-driven inflation pressures, figures from the U.S.
Labor Department showed.
The market is also weighing the possibility of a second
round of strategic petroleum reserve releases, after the U.S.
was reported to be considering it.
Germany and Italy are likely to oppose a second release a
French government source said on Friday.
Analysts such as Commerzbank's Weinberg say the market is
well supplied, a view reiterated by Iran's caretaker oil
minister, who said there is plenty of oil to satisfy global
demand and no need to increase production.
(Additional reporting by Alejandro Barbajosa; Editing by Alison