Crude oil futures gained ground again on Wednesday, as tensions in the Middle East outweighed concerns over a supply glut. March WTI crude oil traded about $1 higher to close just above $65 a barrel. Prices had neared $66 before taking back those gains. Geopolitics have been the latest driver of the oil market. Futures rose as high as $66.48 in late January, driven by renewed tensions between the U.S. and Iran.

The Wall Street Journal reported that the Pentagon has told a second aircraft carrier strike group to prepare to deploy to the Middle East. That came after the U.S. said it is considering seizing tankers with Iranian crude. Iran is the fourth-largest producer among OPEC nations, pumping 3.3 million barrels a day in January.

Additional support for the crude market today came from positive jobs data released on Wednesday. Private payrolls showed growth of 172,000 in January, the largest since December. The unemployment rate also ticked lower to 4.3 percent. Traders are back to betting on a rate cut from the Federal Reserve this year.

On the negative side, Pacific Investment Management Co. and Gunvor Group expect the global oil market to be oversupplied this year. However, the outlook could depend on whether China continues to scoop up surplus barrels for its strategic reserves.

The Energy Information Administration expects China’s aggressive stockpiling to continue at full speed this year.

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