Oil prices held steady on Wednesday as global trade tensions and an expected increase in OPEC+ production in July counterbalanced supply disruptions caused by wildfires in Canada.
Brent crude futures rose 6 cents, or 0.1%, to $65.69 a barrel by 1203 GMT. U.S. West Texas Intermediate (WTI) crude was up 8 cents, or 0.1%, at $63.49.
Ongoing concerns about a supply glut and weakening demand growth continued to limit any strong upside momentum. The Organisation for Economic Co-operation and Development on Tuesday lowered its global growth forecast, citing the impact of U.S. President Donald Trump’s trade war on the American economy, which is expected to weigh on oil demand.
On the supply side, OPEC+ producers plan to increase output by 411,000 barrels per day in July, a move that has been weighing on the market. However, the impact has been partially offset by wildfires in Canada that have cut production by approximately 344,000 barrels per day.
Despite the planned increase, internal OPEC+ dynamics suggest divergence in strategy. Over the weekend, Saudi Arabia and Russia reached a compromise on the July output hike after Riyadh pushed for more and Moscow advocated for a pause. On Wednesday, Russia reported a 35% decline in oil and gas revenue for May, a potential factor in its resistance to further production hikes.
The market also remains sensitive to geopolitical developments. Both Brent and WTI rose nearly 2% on Tuesday, hitting two-week highs amid concerns over supply disruption and speculation that Iran would reject a U.S. nuclear deal proposal that could ease sanctions.
Meanwhile, attention is turning to U.S. inventory data. Industry group figures released Tuesday showed crude stocks fell by 3.3 million barrels for the week ending May 30, while gasoline and distillate inventories posted gains. A government report due later Wednesday is expected to show a 1 million barrel draw in crude, with gasoline and distillates rising by 600,000 and 1 million barrels respectively.
U.S.-China trade tensions continue to loom over the market. Trump and Chinese President Xi Jinping are expected to speak later this week, following Trump’s recent accusation that China violated trade rollback agreements.
