Oil Rises on OPEC+ Plan and Canadian Wildfires

Oil prices surged nearly 3% on Monday, driven by supply concerns stemming from Canadian wildfires and a measured production increase from OPEC+. The producer group reaffirmed its plan to raise output by 411,000 barrels per day (bpd) in July, resisting calls for a more aggressive expansion.

Brent crude gained 2.95%, while U.S. West Texas Intermediate climbed 2.85% during the session. This morning, Brent settled around $65 and WTI at $62.5.

OPEC+'s decision marks the third consecutive month of such an increase, as the group seeks to regain market share and discipline members exceeding their quotas. While sources had hinted at a potentially larger bump, the final figure matched earlier moves, leading some investors to reassess their expectations.

Phil Flynn, senior analyst at Price Futures Group, noted that traders may have anticipated a larger hike. “I think they were caught the wrong way,” he said.

Goldman Sachs analysts predict a final increase of 410,000 bpd in August, citing strong global activity data and seasonal demand. Morgan Stanley forecasts monthly additions of 411,000 bpd through October, totaling 2.2 million bpd, suggesting no slowdown in quota hikes.

Canadian wildfires crimp supply

Adding to the upward pressure, wildfires in Alberta disrupted about 7% of Canada's total crude output. Two thermal oil sands operators near Fort McMurray halted production and evacuated workers. The shutdowns raised alarm over broader supply impacts.

“The wildfires in Alberta are now starting to seep in,” said John Kilduff of Again Capital, underscoring the fires' encroachment on critical oil infrastructure.

Currency and geopolitical undercurrents

A weakening U.S. dollar also lent support to oil prices, as fresh tariff threats from President Donald Trump stoked fears of slower economic growth and higher inflation. A softer dollar makes oil cheaper for holders of other currencies.

Meanwhile, geopolitical tensions simmered. Ukrainian drone attacks on Russia added to market anxiety, while mixed messages from Iran-U.S. nuclear negotiations left traders wary. Though some progress followed last month's talks in Rome, Iran signaled a rejection of the latest U.S. proposal, sustaining uncertainty.

All these factors combined to buoy oil prices, reinforcing the market's sensitivity to both structural decisions and short-term shocks.