Oil prices steadied in Asian trading on Thursday, holding near recent highs after a volatile week marked by heightened geopolitical tensions in Russia and the Middle East, offset by worries of oversupply following an unexpected rise in U.S. crude inventories.

Brent oil futures for November traded at $67.49 per barrel, while West Texas Intermediate crude slipped slightly to $64.34 per barrel by 21:33 ET (01:33 GMT).

Geopolitical Risks Support Prices

Escalating geopolitical tensions continued to underpin oil markets this week. NATO forces fired for the first time in the Russia-Ukraine conflict, after Poland intercepted Russian drones over its airspace. Although Moscow described the incursion as unintentional, concerns of a wider escalation lingered.

In the Middle East, Israeli strikes on Hamas targets in Doha raised fears of prolonged instability, undermining ongoing peace talks. The development reinforced expectations of persistent hostilities in the region.

Additionally, the possibility of stricter U.S. sanctions on Russian oil exports added to supply concerns. President Trump has pushed for higher trade tariffs against India and China, two of Moscow’s top buyers.

OPEC+’s decision earlier this week to raise output by a smaller-than-expected margin in October also contributed to expectations of tighter supply conditions.

U.S. Inventory Build Raises Oversupply Fears

Despite geopolitical risks, oil prices were capped by data pointing to weaker U.S. demand. The Energy Information Administration reported a 3.93 million barrel build in crude inventories last week, far exceeding expectations for a 1.9 million barrel draw.

Gasoline and distillate stockpiles also rose sharply, underscoring cooling fuel demand as the summer driving season came to an end.

At the same time, Russia and China deepened energy cooperation through fresh deals, while India signaled no plans to reduce Russian crude imports — developments that could sustain global supply levels.

Dollar, Inflation Data in Focus

A softer U.S. dollar, after weaker-than-expected producer price index inflation data, lent some support to crude. Attention now turns to U.S. consumer price index data due later Thursday, which could influence expectations for Federal Reserve policy and, indirectly, oil demand outlook.