Crude inventories rose by 2 million barrels in the week to Sept. 4 to 500.4 million barrels, according to an EIA report, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop.
Traditional onshore storage is close to capacity.
Saudi Arabia fears that if it cuts more production to support oil prices, other countries will take advantage and produce greater amounts, jeopardizing the unity of the OPEC+ group.
A swifter rebound in oil production could create another supply glut. Lately, oil futures have slipped to near three-month lows due to oversupply fears.
Tentative U.S. crude cargo departures towards China currently sits at 840,000 bbl/d for the month, the second highest volume on record, according to data intelligence firm Kpler.
Oil futures tumbled on Sept. 8, with Brent dropping below $40/bbl for the first time since June and U.S. crude off more than 8%, after Saudi Arabia cut its October selling prices amid a flare-up of coronavirus cases around the world.
Bears will get support from U.S. crude oil production—two years lost in this sector.
Keisuke Sadamori, IEA director for energy markets and security, told Reuters the outlook for oil was in the midst of either a second wave or a steady first wave of the coronavirus.
The State Department also imposed sanctions on five companies for engaging in transactions related to Iran’s petroleum and petrochemical industry, as well as on three executive officers of the blacklisted companies.
Crude oil inventories fell by 9.4 million barrels in week to Aug. 28 to 498.4 million barrels, according to EIA data, compared with analysts' expectations in a Reuters poll for a 1.9 million-barrel drop.