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(Bloomberg) -- Oil snapped a three-day rally to settle near $70 a barrel with expectations for a supply glut in 2025 countering geopolitical risks.

The International Energy Agency on Thursday reiterated its calls for a large supply surplus next year, despite OPEC’s decision to delay output hikes. The agency’s forecast runs counter to that of the US government, which sees markets in balance next year.

Crude’s inability to surpass its 50-day moving average also stymied the recent rally, with the technical level providing a ceiling for prices for almost three weeks. Still, WTI held onto most of the week’s gains.

“We are swimming in oil and will be for some time,” said Robert Yawger, director of the energy futures division at Mizuho Securities USA. But firm physical markets and the possibility of new sanctions on Russia are allowing some traders to maintain a bullish outlook, he added.

Oil earlier pared losses on reports that the conflict in the Middle East is escalating. Traders tracking the risk of supply disruption in the region pointed to a Times of Israel report saying Israel’s military sees the fall of Syria’s Bashar al-Assad as an opportunity to carry out a strike on Iran. The report, citing unnamed military officials, comes as Israel continues its offensive in the nation.

Meanwhile, US Treasury Secretary Janet Yellen said a softer global oil market might create an opportunity for further action against Russia’s energy sector, and Donald Trump’s pick for national security adviser vowed a return to a maximum pressure campaign against Iran.

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