LONDON: 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 6 cents higher, or 0.1 percent, to $65.69 a barrel by 3:03 p.m. Saudi time. US West Texas Intermediate crude was 8 cents higher, also around 0.1 percent, at $63.49.
Plans by OPEC+ producers to again 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 calculation.
Both benchmarks climbed about 2 percent on Tuesday to a two-week high, driven by worries about supply disruption and expectations that OPEC member Iran would reject a US nuclear deal proposal key to easing sanctions on it.
Iran’s Supreme Leader Ayatollah Ali Khamenei said on Wednesday that abandoning uranium enrichment was “100 percent” against the country’s interests, rejecting a central US demand in talks to resolve a decades-long dispute over Tehran’s nuclear ambitions.
“Geopolitical tensions are simmering in the background, with risks to fundamentals skewed to the upside, as Russian and Iranian oil exports remain elevated,” Barclays analyst Amarpreet Singh said in a research note late on Tuesday.
Russia, however, posted a 35 percent 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.
US 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 Organization for Economic Co-operation and Development cut its global growth forecast as the fallout from Trump’s trade war takes a bigger toll on the US economy.
