Oil Prices Dip on OPEC+ Output and Global Trade Worries

Oil prices slipped slightly in early Asian trading on Wednesday as increased OPEC+ output and global economic concerns outweighed recent gains. Brent crude fell 5 cents to $65.58 per barrel, while U.S. West Texas Intermediate (WTI) declined 9 cents to $63.32.

The retreat followed a 2% rise on Tuesday, driven by fears of supply disruptions from wildfires in Canada and uncertainty over U.S.-Iran nuclear negotiations. Market participants expect Iran to reject the latest U.S. deal proposal, which would have eased oil-related sanctions.

Tsuyoshi Ueno, senior economist at NLI Research Institute, noted that despite Canadian supply concerns and halted Iran talks, oil markets are struggling to extend gains. Rising output from OPEC+ is capping price momentum, he said.

Geopolitical tensions also weigh on sentiment. While a potential call between U.S. President Donald Trump and China’s Xi Jinping is anticipated this week, investor optimism remains muted amid prolonged tariff disputes. Trump recently accused China of reneging on tariff rollback commitments, prompting the U.S. to demand trade concessions from partners by Wednesday.

Economic outlooks have dimmed further. The OECD slashed its global growth forecast on Tuesday, citing mounting damage from the trade war. Analysts fear continued uncertainty will dampen energy demand.

Meanwhile, Canadian wildfires continue to disrupt crude output, adding volatility to supply dynamics. In the U.S., crude inventories dropped by 3.3 million barrels last week, according to the American Petroleum Institute. Gasoline stocks, however, rose by 4.7 million barrels, and distillate inventories increased by 760,000 barrels.

A Reuters survey predicted a smaller 1 million barrel draw in crude stocks. Traders now await official inventory data from the U.S. Energy Information Administration (EIA) for further direction.