two schools of thought.

Debt auction:
The Treasury Dept. is set to auction off $32 billion worth of 2-year bond notes Wednesday, the largest auction of 2-year notes in history. A big shot of supply typically sends bond prices lower.
The auction for the 2-year note closes at 1 p.m. EST on Wednesday.
Oil prices:
Oil prices look to push higher as traders worried whether Tropical Storm Gustav might cut crude supplies that come out of the Gulf Coast of Mexico.
Bond traders always watch oil prices closely, but they are paying especially close attention to see if Gustav would cause oil prices to spike.
Higher oil prices could potentially ignite inflationary fears and send bond prices lower
On the other hand, there is the opposing school that higher oil prices are a tax on the consumer. If oil prices would go up, that would mean the consumer would have less money to spend on other items and that would weaken the economy. A weaker economy sends investors running to the safety of Treasurys, sending bond prices higher.
We will see which school will dominate the market, The two competing pressures could also cancel each other out, mitigating oil's effect on the bond market.