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Iran suspending cooperation with IAEA boosts geopolitical

risk

premium: analyst

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Weaker US dollar supportive of oil prices

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Up next: official US crude inventory report from EIA at

1430 GMT

(Updates prices, paragraph 1 and headline, adds analyst

comment)

By Anna Hirtenstein

LONDON, July 2 (Reuters) - Oil futures edged up on

Wednesday as Iran suspended cooperation with the U.N. nuclear

watchdog and markets weighed expectations of more supply from

major producers next month while the U.S. dollar softened

further.

Brent crude added 56 cents, or 0.8%, to $67.67 a

barrel at 0934 GMT, while U.S. West Texas Intermediate crude

rose 53 cents, or 0.8%, at $65.98 a barrel.

Brent has traded between a high of $69.05 a barrel and low

of $66.34 since June 25, as concerns of supply disruptions in

the Middle East producing region have ebbed following the

ceasefire between Iran and Israel.

Iran put into effect a law on Wednesday that stipulates that

any future inspection of its nuclear sites by the International

Atomic Energy Agency needs approval by Tehran's Supreme National

Security Council. The country has accusing the institution of

siding with Western countries and providing a justification for

Israel's air strikes

"The market is pricing in some geopolitical risk premium

from Iran's move on the IAEA," said Giovanni Staunovo, commodity

analyst at UBS. "But this is about sentiment, there are no

disruptions to oil."

Planned supply increases by the Organization of the

Petroleum Exporting Countries and its allies including Russia,

know as OPEC+, appear already priced in by investors and are

unlikely to catch markets off-guard again imminently, said

Phillip Nova senior market analyst Priyanka Sachdeva.

Four OPEC+ sources told Reuters last week the group plans to

raise output by 411,000 barrels per day next month when it meets

on July 6, a similar amount to hikes agreed for May, June and

July.

"We are all talking about additional supply coming to the

market, but the supply has not really hit the market," Staunovo

said. "Probably because it's being consumed domestically."

Saudi Arabia lifted shipments in June by 450,000 bpd

from May, according to data from Kpler, its highest in more than

a year. However, overall OPEC+ exports are relatively flat to

slightly down since March, Staunovo said. He expects this to

persist over the summer as hot weather drives higher energy

demand.

The greenback continued to weaken, falling to a 3-1/2-year

low against major peers earlier on Wednesday. A weaker dollar

tends to support oil prices, as it could boost demand for buyers

paying in other currencies.

U.S. non-farm payrolls data due on Thursday will shape

expectations around the depth and timing of interest rate cuts

by the Federal Reserve in the second half of this year, said

Tony Sycamore, analyst at IG.

Lower interest rates could spur economic activity which

would in turn boost oil demand.

Official U.S. oil stockpile data from the Energy Information

Administration is due Wednesday at 10:30 a.m. ET.

American Petroleum Institute data late on Tuesday showed

U.S. crude oil inventories rose by 680,000 barrels in the past

week at a time when stockpiles typically draw amid the summer

demand season, sources said.