Oil prices increased nearly 1% in early trading on Wednesday, building on the previous day’s gains as investors considered a new set of sanctions on Iran, a decline in U.S. crude inventories, and a more conciliatory stance from Donald Trump regarding the Federal Reserve. The market discovered support following Trump’s decision on Tuesday to retract threats aimed at dismissing Fed Chair Jerome Powell, subsequent to several days of escalating criticisms directed at him for his reluctance to lower interest rates. Trump also indicated the potential for reduced tariffs on China.

Brent crude futures experienced an increase of 61 cents, translating to a 0.9% rise, reaching $68.05 a barrel at 0007 GMT. Meanwhile, U.S. West Texas Intermediate crude was priced at $64.27 a barrel, reflecting an uptick of 60 cents, or 0.94%.

On Tuesday, the U.S. imposed new sanctions aimed at Iranian liquefied petroleum gas and crude oil shipping magnate, Seyed Asadoollah Emamjomeh, along with his corporate network. The Treasury stated that Emamjomeh’s network is accountable for the shipment of hundreds of millions of dollars’ worth of Iranian LPG and crude oil to international markets.

In the interim, U.S. crude oil inventories experienced a decline of approximately 4.6 million barrels in the previous week, as reported by market sources on Tuesday referencing data from the American Petroleum Institute. At 10:30 a.m. ET on Wednesday, the U.S. government will release data regarding oil stockpiles. According to analysts surveyed by Reuters, the consensus anticipates an average decrease of 800,000 barrels in U.S. crude oil inventories for the previous week.

Trump informed reporters on Tuesday that he would adopt a cordial approach in negotiations with Beijing, indicating that tariffs on imports from the country would decrease substantially following an agreement, though not to zero. U.S. Treasury Secretary Scott Bessent expressed his belief in a potential de-escalation of U.S.-China trade tensions; however, he noted that negotiations with Beijing have yet to commence and are expected to be a “slog,” as reported by an individual who attended his closed-door presentation to investors at a JP Morgan conference.

Crude futures have been negatively impacted by trade tariffs, as investor apprehension regarding a potential global economic slowdown increases.