Oil prices fell slightly on Wednesday after U.S. data showed a bigger-than-expected build in gasoline and diesel inventories, adding to supply concerns amid global trade tensions and ongoing OPEC+ production increases.

Brent crude futures were down 28 cents at $65.35 a barrel by 10:44 a.m. EDT (1444 GMT). U.S. West Texas Intermediate crude futures were down 8 cents at $63.33.

Crude inventories fell by 4.3 million barrels last week, the Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for a 1 million-barrel drop.

However, U.S. gasoline stocks rose by 5.2 million barrels, compared with estimates for a 600,000-barrel increase, while distillate stocks rose by 4.2 million barrels, compared with expectations for a 1 million-barrel increase.

"I think the report is bearish, due to the large build in refined products," Giovanni Staunovo, an analyst at UBS, said.

"There was a sharp increase in refinery demand for crude, which resulted in large crude drawdowns. However, post-Memorial Day, a strong supply increase with weaker implied demand resulted in a large build in refined product inventories," he added.

Plans by OPEC+ producers to increase output by 411,000 barrels per day (bpd) in July also weighed on investors.

Both benchmarks rose about 2% on Tuesday to their highest in two weeks, boosted by concerns about supply disruptions and expectations that OPEC member Iran will reject a U.S. nuclear deal proposal that is key to easing sanctions on it.

Meanwhile, Russia posted a 35% drop in oil and gas revenues in May on Wednesday, which could make Moscow more resistant to further OPEC+ output increases, as such moves weigh on crude prices.

Saudi Arabia and Russia reached a compromise over the weekend on a planned July output increase as Riyadh pushed for more output and Moscow called for a pause, four OPEC+ sources familiar with the talks told Reuters.

U.S. President Donald Trump and Chinese leader Xi Jinping are likely to speak this week, days after Trump accused China of violating a deal to lift tariffs and trade restrictions.

On Tuesday, the Organization for Economic Cooperation and Development (OECD) cut its global growth forecast as the impact of Trump's trade policies takes a bigger toll on the U.S. economy, which in turn will affect oil demand.

"Overall, we see limited upside potential amid ongoing concerns about oversupply and weaker demand growth," analyst Ole Hansen at Saxo Bank said in a note.

Meanwhile, wildfires in Canada that have reduced the country's output by about 344,000 barrels per day, according to Reuters calculations, provided little support to prices. (alg)

Source: Reuters