U.S. Stockpiles Climb, Weighing on Oil Prices

Oil prices continued to run red on Wednesday mid-morning, after U.S. inventory data showed a much larger than expected rise in U.S. crude stockpiles.

Data released Wednesday by the Energy Information Administration showed U.S. commercial crude stockpiles rose by 6.5 million barrels in the week to Oct. 12. A survey of eight analysts estimated crude stocks rose by about 2.2 million barrels last week.

Brent crude was down $1.44, or 1.8%, at $79.97 U.S. a barrel mid-morning Wednesday, after gaining $1.15 in the previous three sessions. The global benchmark, which hit a two-week low last week as equity markets dropped, is trading around $6 below a four-year high of $86.74 U.S. reached on Oct. 3.

U.S. light crude oil fell $1.81, or 2.5%, at $70.11 U.S.

On Tuesday, the American Petroleum Institute reported that U.S. crude inventories tumbled 2.1 million barrels to 408.5 million, throwing a small shock into the market.

Also underpinning sentiment is the scandal over the disappearance of prominent Saudi critic and journalist Jamal Khashoggi, who disappeared two weeks ago after entering the Saudi consulate in Istanbul.

U.S. President Donald Trump gave Saudi Arabia the benefit of the doubt in the case, even as U.S. lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers.

Saudi Arabia has said it will conduct an investigation into the disappearance, U.S. Secretary of State Mike Pompeo said before departing the kingdom for Turkey.

Investors worry that Saudi Arabia could use oil supply to retaliate against its critics.