Canadian Wildfire Supply Fears Provide Limited Support
Oil prices edged lower in Asian trade on Wednesday, as concerns about rising OPEC+ output and persistent U.S.–China tariff tensions overshadowed fears of a supply crunch from Canada and stalled Iran-U.S. negotiations.
At 06:44 GMT, Brent crude dropped 0.3% to $65.46 per barrel, while West Texas Intermediate (WTI) slipped 0.3% to $63.22, paring some of Tuesday’s 2% gain that took both benchmarks to two-week highs.
Supply Jitters Fail to Offset Global Demand Worries
The recent spike was supported by:

Wildfires in Canada, which pose a threat to oil production in Alberta

Iran’s expected rejection of a U.S. nuclear deal, likely delaying a return of sanctioned oil to global markets

But the rally was short-lived. According to Tsuyoshi Ueno of NLI Research Institute, “Despite fears over Canadian supply and stalled Iran-U.S. nuclear talks, oil markets are struggling to extend gains,” with OPEC+ output increases acting as a firm ceiling.
Trade Tensions Cap Risk Appetite
While there is speculation of renewed U.S.-China trade talks, profit-taking and caution remain dominant. On Monday, White House officials confirmed that President Trump and President Xi are likely to speak this week, following accusations from Trump that China violated a prior tariff agreement.
These tensions are clouding the demand outlook. The OECD revised its global growth projection downward, citing escalating fallout from the prolonged U.S. trade war. This macro pressure is directly weighing on energy markets.
For a clearer snapshot of real-time oil performance, traders can refer to the Commodities API, which tracks live and historical pricing across global energy benchmarks, including Brent and WTI.
Market Outlook: Volatility Over Fundamentals
The current price movement reflects a deeper tension:

Geopolitical risk supports short-term prices

Demand-side fears and output growth suppress long-term upside

Data from the Economics Calendar API highlights key upcoming releases that could impact oil further, including global PMI figures and U.S. crude inventory data.
Conclusion: Oil Faces Balancing Act Between Risk and Supply
While headline risks continue to drive short-term moves in oil, the underlying tone remains defensive. Traders are balancing geopolitical supply shocks against a deteriorating macro outlook shaped by trade policy and production shifts.
The market appears poised for more rangebound volatility, until a decisive policy move—on tariffs, production caps, or diplomacy—alters the equation.