NEW YORK (Bloomberg) - Oil surged as the Federal Reserve moved toward a rate-cut to boost the economy even as lingering tensions with Iran threatened to choke Middle East supplies.

Futures in New York closed 2.1% higher for a fourth straight daily gain. The Fed opened a two-day meeting on Tuesday where it’s expected to lower borrowing costs for the first time in more than a decade. OPEC member Iran, meanwhile, appealed to France for help in the face of U.S. sanctions that have caused the OPEC member’s crude exports to plunge.

Prices had earlier surrendered some of their momentum, after U.S. President Donald Trump criticized China in a tweet, even as the two nations resumed trade negotiations in Shanghai on Tuesday. Investors eventually took heart that the talks were continuing after a three-month breakdown, said Bob Yawger, futures director at Mizuho Securities USA LLC.

“The crude oil market loves trade headlines,” he said. “Even if they were negative earlier in the day, at the end of the day the countries are trying to make a deal happen. They’re not there to fail, and that supports oil.”

Oil is still on track for a decline of almost 3% this month as concerns about demand overshadow the risks to Middle East exports.

West Texas Intermediate for September delivery settled $1.18 higher at $58.05 a barrel on the New York Mercantile Exchange.

A steady decline in American oil inventories is also providing some confidence about demand. Crude stockpiles likely fell by 2.75 million barrels last week, according to the median forecast of analysts surveyed by Bloomberg. That would be the seventh straight drop if confirmed by U.S. government data due on Wednesday.

Anticipating bullish news from the Fed and U.S. inventory data, many investors may have moved to increase their exposure to oil, Yawger said, accelerating a late-day rally.

“The energy complex is on the front foot as market players position themselves for a looming Fed rate cut,” analysts at London-based broker PVM Oil Associates Ltd. said in a note to clients. “The guardians of U.S. monetary policy are widely expected to cut interest rates tomorrow which should pressure the dollar and in turn support oil prices.”