August crude oil prices traded higher during the initial morning hours, reaching their highest level since May 30th. There were a number of supportive forces working in favor of the crude oil market, with the latest coming from a surprise cut in Chinese deposit and lending rates. There were also reports that Statoil called for a lockout against oil workers in Norway, which is expected to invoke government involvement. The threat of more than 1.0 million barrels per day in lost production boosted the fear premium in the crude oil market. However, some analysts indicated that such a maneuver could ultimately force a resolution to the conflict sooner than expected. Another source of support for the crude oil market came from private industry data Tuesday that showed a much larger than expected decline in US crude stocks last week. Expectations for this morning's EIA crude oil inventory report are for a draw in the range of 1.75 to 2.0 million barrels.
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