HOUSTON, June 4 (Reuters) - Oil prices edged lower on Wednesday after U.S. data showed larger-than-expected inventories of gasoline and diesel, adding to supply concerns amid global trade tensions and ongoing OPEC+ output increases.
Brent crude futures were down 28 cents to $65.35 a barrel by 10:44 a.m. EDT (1444 GMT). U.S. West Texas Intermediate crude fell 8 cents to $63.33.
The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here.
Crude inventories dropped by 4.3 million barrels last week, the Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for a draw of 1 million barrels.
However, U.S. gasoline stocks rose by 5.2 million barrels versus an estimate for a rise of 600,000 barrels, while distillate stockpiles rose by 4.2 million barrels compared with expectations for a rise of 1 million barrels.
"The report is in my view bearish, due to large builds in refined products," Giovanni Staunovo, an analyst with UBS.
"There was a strong increase in refinery demand for crude, resulting in a large crude draw. But post-Memorial Day, the strong supply increase with weaker implied demand resulted in large refined product inventory increases," he added.
Plans by OPEC+ producers to increase output by 411,000 barrels per day (bpd) in July were also weighing on investors.
Both benchmarks climbed about 2% on Tuesday to a two-week high, driven by worries about supply disruption and expectations that OPEC member Iran would reject a U.S. nuclear deal proposal key to easing sanctions on it.
Russia, meanwhile posted a 35% decline in May oil and gas revenue on Wednesday, which could make Moscow more resistant to further OPEC+ output hikes, as such moves weigh on crude prices.
Saudi Arabia and Russia last weekend reached a compromise on the July output increase plan as Riyadh pushed for more and Moscow argued for a pause, four OPEC+ sources with knowledge of 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 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 policies takes a bigger toll on the U.S. economy, which would in turn impact oil demand.
"Overall, we see limited upside potential amid ongoing concerns about a supply glut and softening demand growth," analyst Ole Hansen at Saxo Bank said in a note.
Offering some support for prices, meanwhile, were wildfires in Canada that reduced the country's output by some 344,000 bpd, according to Reuters calculations.
Additional reporting by Ahmad Ghaddar and Seher Dareen in London and Yuka Obayashi in Tokyo; editing by Jason Neely, Bernadette Baum and Paul Simao
