Oil steady as OPEC+ hikes output while wildfires curb Canadian supply
Oil prices held steady on Wednesday amid global trade tensions and as ongoing OPEC+ output increases were offset by a hit to Canadian supply from wildfires.
Brent crude futures inched 2 cents lower to $65.61 a barrel by 1307 GMT. U.S. West Texas Intermediate crude was 11 cents higher, around 0.2%, at $63.52.
Plans by OPEC+ producers to increase output by 411,000 barrels per day (bpd) in July were weighing on the market, said Janiv Shah, vice president of oil commodity markets analysis at Rystad Energy.
Yet, there was some support as wildfires reduced Canada's production by some 344,000 bpd, according to Reuters calculations.
Both benchmarks climbed about 2% on Tuesday to a two-week high, driven by worries about supply disruption and expectations that OPEC member Iran would reject a U.S. nuclear deal proposal key to easing sanctions on it.
Russia, meanwhile posted a 35% decline in May oil and gas revenue on Wednesday, which could make Moscow more resistant to further OPEC+ output hikes as such moves weigh on crude prices.
Saudi Arabia and Russia last weekend reached a compromise on the July output increase plan as Riyadh pushed for more and Moscow argued for a pause, four OPEC+ sources with knowledge of the talks told Reuters.
U.S. President Donald Trump and Chinese leader Xi Jinping are likely to speak this week, days after Trump accused China of violating a deal to roll back tariffs and trade curbs.
On Tuesday, the Organisation for Economic Co-operation and Development (OECD) cut its global growth forecast as the fallout from Trump's trade policies takes a bigger toll on the U.S. economy, which would in turn impact oil demand.
"Overall, we see limited upside potentials amid ongoing concerns about a supply glut and softening demand growth," analyst Ole Hansen at Saxo Bank said in a note.
Markets are watching for U.S. Energy Information Administration stocks data later in the day. A poll by Reuters estimated that crude inventories fell by about 1 million barrels in the week to May 30, with distillates and gasoline showing builds of 1 million barrels and 600,000 bpd respectively.
API data from Tuesday showed crude stocks falling by 3.3 million barrels for the same week, while fuel inventories rose, sources told Reuters. (Additional reporting by Ahmad Ghaddar in London and Yuka Obayashi in Tokyo; editing by Jason Neely and Bernadette Baum)
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