By Nicole Jao

NEW YORK (Reuters) -Oil prices climbed nearly 3% on Monday on supply concerns as producer group OPEC+ decided not to accelerate plans to hike output and wildfires in Canada's oil-producing province disrupted production.

Brent crude futures settled $1.85, or 2.95%, higher at $64.63 a barrel. U.S. West Texas Intermediate crude gained $1.73, or 2.85%, to $62.52.

Wildfires burning in Canada's oil-producing province of Alberta have affected about 7% of the country's overall crude oil output as of Monday, according to Reuters calculations.

At least two thermal oil sands operators south of the industry hub of Fort McMurray evacuated workers from their sites over the weekend and shut production as a precaution.

"The wildfires in Alberta are now starting to seep in," said John Kilduff, partner at Again Capital in New York.

Also supporting prices, the U.S. dollar slipped across the board on Monday on worries that Trump's fresh tariff threats might hurt growth and stoke inflation.

A weaker U.S. currency makes dollar-priced commodities such as oil less expensive for buyers using other currencies.

Prices were also supported by a perception of increased geopolitical risk after Ukrainian drone strikes against Russia over the weekend, said Rystad Energy's Jorge Leon.

Meanwhile, mixed signals from Iran-U.S. talks kept market participants on edge. An Iranian diplomat said on Monday Iran was poised to reject a U.S. proposal to end a decades-old nuclear dispute. Delegations from the two countries made some progress after a fifth round of talks in Rome last month.

The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, decided on Saturday to raise output by 411,000 barrels per day in July, the third consecutive monthly increase of that amount, as it looks to wrestle back market share and punish members that have produced more than their quotas.

Sources familiar with OPEC+ talks said on Friday that the group could discuss an even larger increase.

Oil traders said the 411,000 bpd increase had already been priced into Brent and WTI futures.

Phil Flynn, a senior analyst with Price Futures Group, said investors had expected the oil-producing group to increase production by more than it did. "I think they were caught the wrong way."

Goldman Sachs analysts expect OPEC+ to implement a final 410,000 bpd production increase in August.

"Relatively tight spot oil fundamentals, beats in hard global activity data and seasonal summer support to oil demand suggest that the expected demand slowdown is unlikely to be sharp enough to stop raising production when deciding on August production levels on July 6," the bank said in a note.