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(Bloomberg) -- Oil edged higher for a third day, settling below $69 a barrel, as traders weighed bullish gasoline draws in the US with a dour long-term outlook.

A US government report showing gasoline stockpiles slid to a 10-year seasonal low supported prices, with gasoline futures outpacing crude’s gain. But the market remained capped by the International Energy Agency warning of a looming supply glut. The agency forecast a 1 million barrel-a-day surplus next year, which could swell further if OPEC+ decides to reverse its production cuts.

Barring disruptions to supply, the outlook is bearish for oil, according to Fawad Razaqzada, a market analyst at City Index and FOREX.com. “Against this backdrop, crude oil looks set for a sharp drop after drifting lower in recent weeks.”

Crude has alternated between weekly gains and losses since mid-October, with traders weighing OPEC+ supply moves, US monetary policy and the risks to oil-demand growth, especially in China. Oil consumption in the world’s largest importer will grow this year at just 10% of the rate seen in 2023, according to the EIA report.

The Middle East was also in focus. Israel was rushing to prepare a cease-fire deal in Lebanon as the government adjusted to the prospect of Trump’s White House return, according to a Washington Post report.

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