Oil prices rose over 1% on Wednesday due to a mix of geopolitical and economic factors.
Brent crude reached $68.65 per barrel, its highest since April 4, and was trading at $68.54 (+1.63%) by Wednesday morning, while United States West Texas Intermediate crude climbed to $64.79 (+1.76%).
The gains were driven by new U.S. sanctions on Iran, a decline in U.S. crude inventories, and a less aggressive stance from President Trump on the Federal Reserve and trade tensions with China.
Hopes for increased energy demand were boosted after President Trump hinted at the potential for reduced tariffs on Chinese goods.
In response, China’s foreign ministry urged the U.S. to abandon threats and coercion if it truly seeks a deal.
Meanwhile, U.S. Treasury Secretary Scott Bessent reportedly told investors in a private meeting that while he expects a de-escalation in U.S.-China trade tensions, formal negotiations haven’t begun and the process would be a “slog.”
Trump softened his criticism of Federal Reserve Chair Jerome Powell, backing off the threat of firing him after days of frustration over the Fed’s refusal to cut interest rates.
However, the International Monetary Fund dampened optimism, warning on Tuesday that global economic growth is set to slow as the effects of Trump’s steep tariffs on nearly all trading partners start to take their toll.
