Oil prices steadied after three days of gains on Oct. 17 after industry data showed a surprise decline in U.S. crude inventories and tension over the disappearance of a prominent Saudi journalist stoked supply worries.

Brent crude was down 10 cents at $81.31/bbl by 0945 GMT, 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 $5 below a four-year high of $86.74/bbl reached on Oct. 3.

U.S. light crude oil was down 20 cents at $72.02/bbl.

"Numbers from the American Petroleum Institute surprised the market (on Tuesday), with U.S. crude oil inventories declining by 2.13 million barrels (MMbbl) over the last week, compared to expectations of a stock build," said ING commodities strategist Warren Patterson.

A Reuters survey ahead of the API data had estimated crude stocks rose about 2.2 MMbbl.

U.S. gasoline stocks dropped by a larger-than-expected 3.4 MMbbl, while distillate fuel stockpiles declined by a smaller-than-expected 246,000 bbl, the API data showed.

Inventory data from the U.S. Energy Department's Energy Information Administration is due at 1430 GMT on Oct. 17.

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 are concerned that Saudi Arabia could use oil supply to retaliate against its critics.

Jim Ritterbusch, president of Ritterbusch and Associates, said Saudi Arabia could cut as much as 500,000 bbl/d of crude production "as a warning shot should the U.S. opt to impose any type of sanction in response to the Khashoggi developments.”

A claim by the U.S. that it aims to reduce Iran's oil exports to zero is a "political bluff," the head of the state-run National Iranian Oil Company was quoted as saying on Oct. 17.

New U.S. sanctions on Iranian oil exports start on Nov. 4, while Iran has accused Saudi Arabia and Russia of breaking an OPEC-led agreement on output cuts by producing more crude.