By Weilun Soon and Alex Longley

(Bloomberg) -- Oil flipped between small gains and losses as traders focused on tensions between the US and Iran that have overshadowed signs of swelling supplies.

Brent was trading near $69 a barrel, after gaining almost 1% on Wednesday. While US President Donald Trump signaled his goal was to reach a nuclear deal with Tehran — he commented after talks with Israeli Prime Minister Benjamin Netanyahu — traders remain concerned about the potential for military strikes and risks to supply.

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Crude has gained every week this year, with a single exception, as geopolitical risks and supply disruptions drove futures higher. The US intervened in Venezuela in January, then pivoted to Iran after a wave of protests challenged the Islamic Republic’s leadership.

Still, banks maintain that there is abundant supply, with Goldman Sachs Group Inc. saying that the surplus was appearing, but mainly in locations that are less significant for price-setting. The International Energy Agency said on Thursday that global oil stockpiles grew at the strongest pace since 2020 last year, underscoring the view that a period of oversupply has arrived, even if it isn’t being felt evenly across the globe.

As the US-Iranian tensions play out, Washington has positioned a naval force in the region. After meeting Netanyahu, Trump said a deal with Tehran was his preference, according to a social-media post. But if that didn’t happen, “we will just have to see what the outcome will be,” Trump said.

Prices are likely to stay rangebound, with pullback from diplomatic progress to be limited given the major political hurdles to any durable deal, said Vandana Hari, founder of Vanda Insights.

“Additional adversarial rhetoric or military posturing may add incremental risk premium, but gains are likely to be capped unless US strikes on Iran appear imminent,” Hari said.

Flows from Venezuela are also in focus. China has bought some Venezuelan oil that was purchased earlier by the US, Energy Secretary Chris Wright said at a roundtable with the media in Caracas, without giving details. The Latin American country’s so-called oil quarantine was essentially over, he added.

--With assistance from John Deane.

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