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By Collin Eaton
HOUSTON (Reuters) - Oil prices plunged more than 2% on Tuesday to their lowest since the Sept. 14 attacks on Saudi Arabia's key oil facilities, after U.S. President Donald Trump rekindled fears the U.S.-China trade conflict that has crimped energy demand is far from over.
In a United Nations address, Trump accused China of unfair trade practices, including "massive" market barriers, currency manipulation and intellectual property theft, a few days after officials from the world's two largest oil-consuming economies held inconclusive trade talks in Washington.
"Hopefully we can reach an agreement that will be beneficial for both countries," Trump said. "As I have made very clear, I will not accept a bad deal."
Brent crude futures <LCOc1>, the international standard, settled $1.67, or 2.6%, lower at $63.10 a barrel, while West Texas Intermediate futures <CLc1> ended at $57.29 a barrel, down $1.35, or 2.3%.
Trump "ratcheted up the U.S.-China trade war again," said John Kilduff, a partner at Again Capital LLC in New York. "It wasn't a constructive tone in trying to get that resolved, and we know how sensitive oil prices are to the back and forth."
The U.S. president's address left the oil market with the grim impression that "it's not a deal that's going to get done quickly," which could continue to hamper global oil demand growth, said Robert Yawger, director of energy futures at Mizuho in New York.
U.S. stocks fell, with the S&P 500 and the Nasdaq poised for the biggest declines in a month, as calls for impeachment of Trump gained momentum, while weak consumer confidence data added to worries over the prolonged Sino-U.S. trade war. [.N] <.DJI>
A private sector report showed U.S. consumer confidence fell by the most in nine months in September.
Sluggish economic data in leading European economies and Japan also weighed on crude prices, analysts said.
"We continue to see a constant revision downward for 2019 oil demand," with many forecasters predicting demand to grow around 1 million bpd or less, said Andy Lipow, president of Lipow Oil Associates in Houston.
"Given continued U.S. production growth and new production in Norway and Brazil, the market feels oversupplied, even though Saudi oil production has been impacted over the past 10 days," Lipow said.
Prices extended their losses in after-hours trading as industry data showed an unexpected build in U.S. crude stockpiles.
U.S. crude inventories rose 1.4 million barrels last week, the American Petroleum Institute said, compared to analysts' forecasts of a 200,000-barrel drawdown. The government will release its weekly inventory report on Wednesday.[EIA/S]