By Osamu Tsukimori
TOKYO (Reuters) - Oil steadied on Thursday as support from ongoing tensions over the disappearance of a prominent Saudi journalist offset a big drop overnight due to a jump in U.S. crude stockpiles.
U.S. West Texas Intermediate crude for October delivery was up 1 cent at $69.76 a barrel by 0650 GMT, after falling 3 percent in the previous session to settle below $70 for the first time in a month.
Front-month London Brent crude for December delivery was down 5 cents, or 0.1 percent, at $80.00, having ended down 1.7 percent.
U.S. crude stocks rose 6.5 million barrels last week, the U.S. Energy Information Administration said on Wednesday, the fourth straight weekly build and almost triple what analysts had forecast.
"The impact of the inventory-jump weighed on the market and oil seems bearish," said Kaname Gokon, a trader in Japan.
"The United States may have to go ahead with sanctions on Saudi Arabia, which could push prices higher, but Russia and other producers are set to increase supplies."
Inventories rose sharply even as U.S. crude production slipped 300,000 barrels per day (bpd) to 10.9 million bpd last week due to the effects of offshore facilities closing temporarily for Hurricane Michael.
U.S. lawmakers pointed the finger at the Saudi leadership over the disappearance of Saudi critic Jamal Khashoggi, suggesting sanctions could be possible.
Saudi Arabia denies that it had any role in Khashoggi's disappearance.
U.S. President Donald Trump said on Wednesday he did not want to abandon ally Saudi Arabia over the disappearance and has asked for audio recordings Turkish sources say indicate he was killed by Saudi agents.
Investors worry Saudi Arabia could use oil supply to retaliate against critics. But Saudi Arabia has assured OPEC that it is "committed, capable and willing" to ensure there will be no shortage in the oil market, OPEC's secretary-general said on Wednesday.
Should Saudi Arabia curb exports to the United States, the latter, could adjust domestic supply-demand by replacing oil sources and reducing shale oil exports, Takashi Tsukioka, president of the Petroleum Association of Japan, told reporters on Thursday.
Signs that Iranian oil exports have been falling more steeply than some in the market expected amid looming U.S. sanctions on the OPEC producer in early November have also underpinned the oil market.
(Reporting by Osamu Tsukimori; Editing by Richard Pullin and Joseph Radford)
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