Oil prices rose more than 1% on Wednesday after US President Donald Trump threatened to resume bombing Iran if it did not "behave better," though prices remained near their lowest levels in 3 months, weighed down by expectations of ample supply after the International Energy Agency warned of a surplus next year.
During trading, Brent crude futures gained 93 cents, or 1.2%, to $79.89 a barrel, while US West Texas Intermediate crude rose 79 cents, or 1%, to $76.84 a barrel.
Both contracts had earlier touched their lowest levels since early March during the session.
In its first forecasts for 2027, the International Energy Agency said the oil market would see a significant supply surplus, with global production expected to rise by around 8 million barrels per day while demand grows by only 2 million barrels per day.
In the near term, the agency added that the Tehran-Washington agreement opens the door to replenishing depleted stockpiles or building new strategic reserves.
"There may be insufficient appreciation in markets of the depth of the supply surplus we are facing," said Crispus Nyaga, research analyst at Empire FX.