Oil prices were mostly steady on Thursday, with traders holding back after a drop earlier this week on a stronger U.S. dollar and concerns about rising supply amid slowing demand growth.

Brent crude futures were down 3 cents at $72.25 a barrel by 0937 GMT. U.S. West Texas Intermediate crude futures were down 7 cents at $68.36.

"The main driver of oil prices, both in the short term and going forward, is the direction of the U.S. dollar," said Danish Lim, investment analyst at Phillip Nova.

The dollar's recent rise has been the main downward pressure, said Lim, who expects the oil market to remain volatile, with a bearish bias.

The dollar surged to a one-year high on Thursday, extending gains from Wednesday's seven-month high against major currencies after data showed U.S. inflation rose in line with expectations in October.

This, in turn, fueled concerns about slowing demand in the United States.

The market is a "mix of weak demand factors", with the latest concerns being the rally in the US 10-year Treasury yield and a jump in the 10-year breakeven inflation rate to 2.35%, said OANDA senior market analyst Kelvin Wong.

"(This) increases the likelihood of a shallow Fed rate-cutting cycle into 2025 (and) overall, there is less liquidity to fuel an increase in oil demand," he added.

The US Energy Information Administration has slightly raised its global oil production forecast for 2024 to 102.6 million barrels per day (bpd), from a previous estimate of 102.5 million bpd, driven by an expected 300,000 bpd increase in US production. For 2025, it expects world production to be 104.7 million bpd.

Source: FXStreet