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Oil prices rose on Wednesday, extending the prior day's gains, as investors weighed a fresh round of US sanctions on Iran, a drop in US crude stocks and a softer tone from President Donald Trump toward the Federal Reserve.
Brent crude futures climbed 55 cents, or 0.8 per cent, to $67.99 a barrel at 0400 GMT, while US West Texas Intermediate crude was up 54 cents, or 0.9 per cent, at $64.21 a barrel.
The US issued new 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 US Treasury said in a statement.
"The US issued fresh sanctions targeting Iranian energy supplies, which worried markets," said senior market analyst Priyanka Sachdeva at Phillip Nova.
Both benchmark prices this morning were also backed by hope of positive turnout between the US and China over import tariffs, Sachdeva said.
Trump on Tuesday backed off from the notion of firing Fed Chair Jerome Powell after days of intensifying criticism for not cutting interest rates. Trump also signalled the possibility of lower tariffs on Chinese imports.
Meanwhile, US crude oil inventories fell by around 4.6 million barrels last week, market sources said on Tuesday citing American Petroleum Institute data.
US government data on oil stockpiles is due at 10:30 am ET (1430 GMT) on Wednesday. Analysts on average estimated an 800,000 barrel decline in US crude oil stocks last week, a Reuters poll showed, reports Reuters.
Trump told reporters on Tuesday he would be "nice" in negotiations with China and that tariffs would fall significantly following a deal, but not to zero.
US Treasury Secretary Scott Bessent said he believed there will be de-escalation in Sino-US trade tension but that negotiations have not yet started and would be a "slog", a person who heard his closed-door presentation to investors at a JP Morgan conference told Reuters.
Trade tariffs have weighed on crude futures on investor concern about their potential to slow global economic growth.