Brent crude also dipped below $80 a barrel but ended at $80.05, $1.36 or 1.7 percent lower.
But spare capacity remains at precariously low levels and could remain below 1 million barrels a day through the fourth quarter, depending on the effectiveness of US sanctions on Iranian crude and refined export products, he said.
Additionally, the latest shipping data provided by Refinitiv Eikon confirmed that so far, a total of 22 million barrels of Iranian crude oil loaded on NITC supertankers are expected to arrive at Dalian in October and November.
At one point earlier this year, Beijing was said to have agreed not to increase the amount of Iranian crude it buys, but since then the trade row between China and the United States has deepened, casting a shadow over the likelihood of China sticking to its word.
Moreover, Managing Director of the National Iranian Oil Company (NIOC) Ali Kardor said on Wednesday that the U.S. threat to get Iran's oil exports to zero was just a "political bluff".
"Stocks are rising in the USA, and the reason is because pipes out of the US for exports are maxed out while USA production is rising", said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB.
Oil prices fell on Thursday as investors' concerns returned to the impact an escalating trade row between China and the United States will have on oil demand growth and data showing ample supplies. us crude was down 77 cents at $68.98.
Western pressure mounted on Riyadh to provide answers, but comments by President Donald Trump suggested that White House may not take additional actions against the Saudis, specifically after Saudi Arabia said it will conduct a probe.
For example, if the U.S. were to halt or reduce production, the implications would be big because the price increase could be high.
These declines came despite increasing tensions with Saudi Arabia, the world's largest oil exporter. Some of the biggest refineries and commercial oil storage facilities in China are located in Dalian.
Meanwhile, revisions to global economic forecasts by the International Monetary Fund, fueled by trade disputes between the U.S. and its partners, "cast more uncertainty over oil demand growth in 2019", the document said.
Also, more analysts are believing the impact of renewed US sanctions on Iran, which are due to take full effect on November 4, has been fully priced into the market. In November it will be clear how much Iran will lose in the market because of the sanctions, although it's hard to imagine a full halt of Iranian shipments by Nov. 4, the date the sanctions will go into full effect.