Oil prices edged higher in Asian trading on Monday after U.S. President Donald Trump extended a deadline for his proposed reciprocal tariffs against the European Union.

However, gains were limited as oversupply worries persisted amid reports that the oil-procuring cartel, OPEC+, might hike production again in July.

As of 21:18 ET (01:18 GMT), Brent Oil Futures expiring in July rose 0.2% to $64.93 per barrel, while West Texas Intermediate (WTI) crude futures gained 0.3% to $61.69 per barrel.

"We're likely to hear lots of noise this week ahead of the OPEC+ meeting on Sunday, 1 June, where the group will decide on output policy for July," ING analysts said in a note.

Trump extends deadline for 50% tariffs on EU to July
President Trump on Sunday announced an extension of the deadline for imposing 50% tariffs on European Union imports, moving it from June 1 to July 9.

This decision followed a phone call with European Commission President Ursula von der Leyen, during which both leaders agreed to intensify trade negotiations in the coming weeks.

The extension alleviated immediate concerns over a potential escalation in the U.S.-EU trade dispute, which had been unsettling global markets.

The postponement of tariffs is seen as a positive development for global economic stability, which in turn supports energy demand forecasts. Additionally, the move provides a window for diplomatic efforts to resolve trade tensions, further bolstering investor confidence.

The Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, are weighing the possibility of another production boost at their upcoming meeting on June 1, Bloomberg News reported last week.

The upcoming meeting is set to be a pivotal moment for the oil market, as the group's decision on production levels could have significant implications for global oil supply and prices.

According to the report, one option under consideration is a supply increase of 411,000 barrels per day in July, though no final decision has been made.

"We're assuming in our balance sheet that the group will agree to increase output by another 411k b/d in July. This should keep the market well supplied over the second half of this year," ING analysts wrote.

OPEC+ has been in the process of unwinding output cuts, with additions to the market in May and June.

Meanwhile, President Trump said he had "very good" talks with Iranian officials at the fifth round of nuclear negotiations over the weekend.

If the negotiations make progress or lead to an easing of U.S. sanctions, Iran could increase its crude oil exports, further underpinning a supply surplus scenario.

Source: Investing.com