Brent crude futures dipped 5 cents, or 0.1%, to $65.58 a barrel by 0040 GMT while U.S. West Texas Intermediate crude was at $63.32 a barrel, down 9 cents, or 0.1%.
Both benchmarks climbed about 2% on Tuesday to a two-week high, supported by worries over supply disruptions from Canadian wildfires and expectations that Iran will reject a U.S. nuclear deal proposal that is key to easing sanctions on the major oil producer.
“Despite fears over Canadian supply and stalled Iran-U.S. nuclear talks, oil markets are struggling to extend gains,” said Tsuyoshi Ueno, senior economist at NLI Research Institute, adding that OPEC+ production increases were capping the upside.
Ueno said hopes for progress in U.S.-China trade talks were overshadowed by profit-taking, as investors remained cautious over the broader economic fallout from tariffs.
U.S. President Donald Trump and Chinese leader Xi Jinping will likely speak this week, White House press secretary Karoline Leavitt said on Monday, days after Trump accused China of violating an agreement to roll back tariffs and trade restrictions. As the Trump administration pressed U.S. trading partners to provide their best offers by Wednesday, the protracted negotiations and moving deadlines have led economists to scale back growth forecasts. 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.
Meanwhile, scores of wildfires have swept across Canada since the start of May, forcing thousands of evacuations and disrupting crude oil production in the country.
U.S. crude stocks fell by 3.3 million barrels in the week ended May 30, market sources said, citing American Petroleum Institute figures on Tuesday. Gasoline inventories rose by 4.7 million barrels and distillate stocks rose by about 760,000 barrels. [API/S]
A Reuters poll of nine analysts estimated an average draw of 1 million barrels in crude stocks. [EIA/S]
Official inventory data from the U.S. Energy Information Administration (EIA) is due on Wednesday.
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