Oil prices steady as expected OPEC+ output increase offsets Canada supply pressure

Oil prices held steady on Wednesday as concern around the OPEC+ groups next output increase were offset by Canadian supply pressures due to wildfires there, while global trade tensions continue to linger, Reuters reported.

Brent crude futures inched 18 cents lower, or down around 0.3%, at $65.45 a barrel by 0905 GMT, while U.S. West Texas Intermediate crude was 19 cents lower, also down 0.3%, at $63.22 a barrel.

The unwinding of 411,000 barrels per day (bpd) in July by OPEC+ states was weighing on the market, Janiv Shah, vice president of oil commodity markets analysis at Rystad Energy said, but there was some support from the removal of Canada’s 344,000 bpd production due to the wildfires.

Both benchmarks climbed about 2% on Tuesday to a two-week high, driven by worries over supply disruption and expectations that Iran would reject a U.S. nuclear deal proposal key to easing sanctions on the major oil producer.

“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.

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 war takes a bigger toll on the U.S. economy.