Oil prices slipped on Thursday as the possibility of US tariffs being reinstated raised demand concerns ahead of an expected supply boost by major producers.
Brent crude futures fell 58 cents, or 0.8%, to $68.53 a barrel by 0942 GMT. US West Texas Intermediate crude declined 57 cents, or 0.9%, to $66.88.
Both contracts had hit one-week highs on Wednesday as Iran suspended cooperation with the UN nuclear watchdog, raising concerns the lingering dispute over its nuclear program could again devolve into armed conflict.
A preliminary trade deal between the US and Vietnam also boosted prices.
Tariff uncertainty looms large, however. The 90-day pause on the implementation of higher US tariffs ends on July 9, with several large trading partners yet to wrap up trade deals, including the European Union and Japan.
The OPEC+ group of oil producers, meanwhile, is expected to agree to raise output by 411,000 barrels per day (bpd) at its policy meeting this weekend. Adding to negative sentiment, a private-sector survey showed that service activity in China - the world's biggest oil importer - expanded at its slowest pace in nine months in June as demand weakened and new export orders declined. A surprise build in US crude inventories also highlighted demand concerns in the world's biggest crude consumer.
The US Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.
The market will be watching for the US monthly employment report on Thursday, which is likely to shape expectations over the depth and timing of interest rate cuts by the Federal Reserve in the second half of the year, analysts said.
Lower interest rates could spur economic activity that would boost oil demand.
