Oil prices slipped in Asian trade on Wednesday, weighed down by concerns of increasing OPEC+ output and tariff tension that threatens the global economic outlook, though worries about Canadian supply provided a floor.

Brent crude futures dipped 17 cents, or 0.3%, to $65.46 a barrel by 0644 GMT, while U.S. West Texas Intermediate crude was down 19 cents, or 0.3%, at $63.22 a barrel.

Both benchmarks climbed about 2% on Tuesday to a two-week high, driven by worries over supply disruption from Canadian wildfires and expectations that Iran would reject a U.S. nuclear deal proposal 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 the OPEC+ increases were capping the upside.

Ueno said hopes for progress in U.S.-China trade talks were overshadowed by profit-taking, as investors stayed cautious over the broader economic fallout from tariffs.

U.S. President Donald Trump and Chinese leader Xi Jinping are likely to speak this week, White House press secretary Karoline Leavitt said on Monday, days after Trump accused China of violating a deal to roll back tariffs and trade curbs.

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.

Analysts weighed the impact of OPEC+ increases and the Canadian wildfire situation on oil supply.

"The current backwardation in the front of the crude oil futures curve is a result of low inventory balances observed since the beginning of the year," BofA analysts told clients in a note.

"In contrast, the contango further out on the curve suggests the market anticipates future slack due to OPEC's planned supply increases and a broader deceleration of the global economy."

Markets were still expecting the wildfires that have swept Canada since May to crimp supply, despite a temporary respite from wet weather.

"However, this relief could be short-lived amid forecasts for drier and warmer weather towards the end of this week," ING analysts said in a client note.

Some analysts expect the loss in Canadian supply to offset more than half the increases next month planned by OPEC+.

"Estimates suggest around 350,000 barrels per day have been affected and shut in," said SEB analyst Ole Hvalbye, referring to the impact of the wildfires.

"To put this in context, the disruption exceeds three-quarters of the volume OPEC+ agreed to add to the market in July."

Source: Investing.com