08:38 AM EDT, 06/25/2025 (MT Newswires) -- Oil prices edged up early on Wednesday after shedding more than US$10 per barrel in the prior two sessions as calming Middle East tensions cut into the commodity's risk premium and traders again focus on supply and demand fundamentals.

West Texas Intermediate crude oil for August delivery was last seen up US$0.17 to US$64.54 per barrel, while August Brent crude was up US$0.20 to US$67.34.

Prices moved sharply lower in the week's first two sessions after the United States' weekend attack on Iranian nuclear sites and a ceasefire in the 12-day war between Israel on Iran calmed fears over a wider war in the Persian Gulf region, which supplies about 20% of global oil demand.

"The geopolitical risk premium-at one point exceeding $10 per barrel on Monday-was unlikely to be sustained in the absence of actual supply disruptions. This is especially true given macro headwinds tied to the ongoing U.S.-China trade war, and an outlook for ample supply into the autumn and winter months following recent output target increases from OPEC+," Ole Hansen, head of commodity strategy at Saxo Bank, wrote.

OPEC+ is expected to deliver another monthly tranche of 411,000 barrels per day of additional supply beginning on July 1, while production outside the cartel is also on the rise. S&P Global Commodity Insights on Tuesday raised its forecast for production from Canada's oil sands to a record 3.5-million bpd this year, 5% above 2024, while output is also on the rise in the United States and South America.

However the higher supply is being met by strong summer demand. In its weekly survey released Tuesday, the American Petroleum Institute reported U.S. oil inventories fell for a fifth-straight week, with stocks down by 4.28-million barrels last week, well more than the consensus estimate for a drop of 0.6-million barrels, according to Investing.com. The Energy Information Administration will release official inventory data later on Wednesday morning.