Oil prices rose more than 2% on Monday, even as the OPEC+ producer group stuck to its output hike plan, as wildfires in Canada's oil-producing provinces threatened supplies and President Donald Trump's threat of new tariffs weighed on the dollar.

Brent crude rose $1.76, or 2.8%, to $64.54 a barrel by 2:14 p.m. EDT (1814 GMT). U.S. West Texas Intermediate crude rose $1.63, or 2.68%, to $62.42.

Wildfires burning in Canada's oil-producing province of Alberta have affected about 7% of the country's total crude output as of Monday, according to Reuters calculations.

At least two thermal oil sands operators south of the industrial hub of Fort McMurray evacuated workers from their sites over the weekend and shut production as a precaution.

"The wildfires in Alberta are starting to seep in," said John Kilduff, a partner at Again Capital in New York. "We're going to lose some barrels."

Also supporting prices, the U.S. dollar (.DXY), opens new tab , slumped across the board on Monday on concerns that Trump's new tariff threats could hurt growth and stoke inflation.

A weaker U.S. currency makes dollar-priced commodities like oil cheaper for buyers using other currencies.

Prices were also supported by a rise in geopolitical risk premiums after a Ukrainian drone attack on Russia over the weekend, said Jorge Leon of Rystad Energy.

The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, voted on Saturday to raise output by 411,000 barrels per day (bpd) in July, the third straight monthly increase of that amount, as it seeks to claw back market share and punish members that have pumped more than their quotas.

A source familiar with the OPEC+ talks said on Friday that the group could discuss a bigger increase.

Oil traders said the 411,000 bpd increase had already been factored into Brent and WTI futures prices.

"If they do it by a larger amount in a surprise move, then Monday's opening price will be very bad," Onyx Capital Group analyst Harry Tchilinguirian wrote on LinkedIn.

Goldman Sachs analysts expect OPEC+ to implement a final output increase of 410,000 bpd in August.

"Relatively tight oil fundamentals, strong global activity data and summer support for oil demand suggest that the expected slowdown in demand will not be sharp enough to halt production increases when it decides on August production levels on July 6," the bank said in a note.

Morgan Stanley analysts also said they expect 411,000 bpd to be added each month to a total of 2.2 million bpd in October.

"With this latest announcement, there is little sign that the pace of quota increases is slowing," the bank's analysts said. (alg)

Source: Reuters