By Timothy Puko 

Oil prices turned lower on Wednesday after government data showed an unexpectedly large addition to U.S. crude stockpiles.

The U.S. Energy Information Administration reported that crude stocks increased by 4.7 million barrels last week, compared with analysts' expectations for an increase of just 100,000 barrels. The latest move in prices added another big retreat to a series of swings on Wednesday.

The crude market is at its most volatile point in years, hitting high points for big daily swings that haven't been seen since the early 1990s and the first U.S. war in Iraq. On Wednesday, prices flipped between a 3.5% loss and a 1.9% gain amid conflicting signs about the health of the global economy.

Light, sweet crude for October delivery traded down $1.47, or 3.2%, to $43.94 a barrel on the New York Mercantile Exchange. It had reached as high as $46.32 after prices surged around 9 a.m.

Brent, the global benchmark, lost $1.04, or 2.1%, to $48.52 a barrel on ICE Futures Europe. It had reached as high as $50.79 a barrel.

The unexpected increase in stockpiles likely came from imports, said Scott Shelton, broker at ICAP PLC. They rose to nearly 7.9 million barrels a day in the week ended Aug. 28, up from 7.2 million last week.

"The actual...economics aren't very good for sending crude to the U.S. (but) the Saudis could care less," Mr. Shelton said. "They sell barrels to the markets that they want."

Saudi Arabia, the world's largest oil exporter, has been ramping up production in order to keep its customers during a year-long collapse in the crude market. The oil-and-gas boom from U.S. shale production has helped flood the market and sink oil prices nearly 60% from their 2014 highs.

Domestic crude inventories rose to 455.4 million barrels last week, up from 450.8 million last week, the EIA said. Gasoline stockpiles fell by 271,000 barrels, compared with analysts' expectations for a 1.5 million-barrel decline.

Diesel supplies rose by 115,000 barrels, less than the 1.2-million-barrel increase that analysts had expected.

Gasoline futures fell 1.1% to $1.381 a gallon, and diesel futures slipped 0.9% to $1.5638 a gallon.

The continued battle to pump and sell more oil undercut a small recovery the market had seen on stock-market-related optimism earlier in the morning.

Data showed that private-sector payrolls in the U.S. rose by 190,000 last month, versus the increase of 200,000 expected, according to payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics. The data have some expecting central bankers will hold off on interest-rate increases, a potential boon for stocks.

Citigroup Inc. research released last week showed that oil prices and the S&P 500 stock index have moved nearly in tandem since mid-August. Returns from the index and Brent futures have been correlated as high as 0.8, compared with a maximum possible 1. Both markets have been concerned about signs of a slowdown coming from China and wild swings in Chinese equities.

"The China data is making people nervous to the downside and the production data is making people nervous to the upside," said Torbjorn Kjus, an oil analyst at DNB Bank.

Ese Erheriene and

Josie Cox

contributed to this article.

Write to Timothy Puko at tim.puko@wsj.com

(END) Dow Jones Newswires

September 02, 2015 11:55 ET (15:55 GMT)