Oil prices climb on OPEC+ decision and Canadian wildfire fears

Oil prices jumped over $1 this Wednesday after OPEC+ opted to maintain its current production policy, reassuring markets already jittery from potential supply disruptions in Canada, according to Reuters.

The decision defied investor speculation of a production boost and underscored OPEC+'s cautious stance amid a complex global outlook.

Market reaction: Brent and WTI rally

By midday trading, Brent crude rose 1.79% to $65.24 per barrel, while WTI climbed 2.09% to $62.16, buoyed by expectations of stronger demand during the upcoming summer season and ongoing supply concerns.

OPEC+ holds steady, plans for future adjustments

The OPEC+ alliance,which includes the Organization of the Petroleum Exporting Countries and key allies like Russia, confirmed it would keep current production levels unchanged, while agreeing to a future mechanism for adjusting output baselines in 2027.

This move reflects both strategic restraint and a longer-term vision, though it fell short of market hopes for near-term adjustments to halt price declines.

Limited capacity weakens immediate impact

According to Bob Yawger, energy futures director at Mizuho, most member countries lack the spare capacity to influence market volumes significantly, limiting their ability to respond aggressively to price shifts. 

"They were hoping to slow the pace of production increases and stop the price decline. But that didn't happen," Yawger noted.

Eyes on saturday’s key OPEC+ subgroup meeting

Further developments may arise this Saturday, when eight key OPEC+ producers convene to decide on potential output changes for July. 

While some analysts expect a possible increase, Goldman Sachs projects no shift, pointing to new supply projects coming online later this year and slowing global growth, which could expand oil inventories.

Risks remain tilted to the upside

However, risks to supply forecasts remain tilted upward, especially if compliance with quotas weakens or if global demand picks up more than expected. 

This uncertainty keeps markets sensitive to even minor changes in supply and demand data.

Driving season and Canadian fires stoke demand for OPEC+ oil

Analysts from Rystad Energy highlight that demand is poised to rise with the northern hemisphere’s driving season approaching. 

Non-OPEC+ supply has remained largely stagnant this year, and wildfires in Canada pose further risks to supply continuity, amplifying the importance of OPEC+ barrels in global markets.

A fragile balance ahead

In short, while the headlines point to a policy of restraint, the underlying message is clear: the oil market is entering a fragile phase, where tight balances, weather events, and geopolitical moves could all have outsized effects.

Oil prices climb on OPEC+ decision and Canadian wildfire fears