HOUSTON: Oil prices rose almost 1% in early trade on Wednesday, extending the prior day’s gains as investors weighed a fresh round of sanctions on Iran, a drop in U.S. crude stocks and a softer tone from Donald Trump on the Federal Reserve.
The market found support after Trump backed off from threats to fire Fed Chair Jerome Powell on Tuesday after days of intensifying criticism of him for not cutting interest rates. Trump also signalled the possibility of lower tariffs on China.
Brent crude futures rose 61 cents, or 0.9%, to $68.05 a barrel at 0007 GMT, while U.S. West Texas Intermediate crude was at $64.27 a barrel, up 60 cents, or 0.94%.
The U.S. issued fresh sanctions targeting Iranian liquefied petroleum gas and crude oil shipping magnate, Seyed Asadoollah Emamjomeh and his corporate network on Tuesday.
Emamjomeh’s network is responsible for shipping hundreds of millions of dollars’ worth of Iranian LPG and crude oil to foreign markets, the Treasury said in a statement.
Meanwhile, U.S. crude oil inventories fell by around 4.6 million barrels last week, market sources said on Tuesday citing American Petroleum Institute data.
U.S. government data on oil stockpiles is due at 10:30 a.m. ET (1430 GMT) on Wednesday. Analysts polled by Reuters expect, on average, an 800,000 barrel decline in U.S. crude oil stocks for last week.
Trump told reporters on Tuesday he would be very nice in negotiations with Beijing and that tariffs on imports from the country would fall significantly following a deal, but not to zero.
And U.S. Treasury Secretary Scott Bessent said that he believes there will be a de-escalation in U.S.-China trade tensions, but negotiations with Beijing have not yet started and would be a “slog,” according to a person who heard his closed-door presentation to investors at a JP Morgan conference.
Trade tariffs have weighed on crude futures as investors grow concerned about a global economic slowdown.
