Oil prices drop as hopes for U.S.-China trade progress wilt

* Brent futures down 0.5%, WTI off 0.4%
* High-level talks begin on Thu, no progress seen in early
contact
* U.S. weekly crude stocks rise by 2.9 mln bbls last week -
EIA

By Jane Chung
SEOUL, Oct 10 (Reuters) - Oil prices slid on Thursday as
hopes faded for any significant progress in U.S.-China trade
talks that could dispel clouds over the global economy and gloom
over prospects for weaker oil demand.
Global benchmark Brent crude futures LCOc1 fell 26 cents,
or 0.5%, to $58.05 a barrel by 0133 GMT, while U.S. West Texas
Intermediate crude CLc1 was at $52.38 per barrel, down 21
cents, a 0.4% drop.
Chinese government officials told Reuters that China has
lowered its expectations for progress in the talks to end a
15-month-old tit-for-tat trade dispute that has slowed global
economic growth, upset by the U.S. blacklisting of Chinese
companies. U.S. President Donald Trump expressed optimism on Wednesday,
saying there was a very good chance the two sides will reach a
trade agreement. But with high-level trade discussions set to
start later on Thursday, the South China Morning Post reported
the pair had made no progress in preliminary, lower-level talks.
"Oil prices are basically left weighed down by yet another
trade war anvil around the market neck," said Stephen Innes,
Asia Pacific market strategist at AxiTrader.
"Traders likely have their finger to the wind trying to
gauge the intensity of the latest headwinds but at minimum
prices could be capped until the markets get some type of
favourable headline tailwind at least," Innes said
Adding to concerns, U.S. crude stocks rose 2.9 million
barrels in the week to Oct. 4, the Energy Information
Administration (EIA) said, more than double analysts'
expectations for an increase of 1.4 million barrels. EIA/S
Meanwhile, the Organization of the Petroleum Exporting
Countries (OPEC) has granted Nigeria a higher oil output target
under an OPEC-led supply cut deal, lifting the quota to 1.774
million barrels per day (bpd) from 1.685 million bpd, three OPEC
delegates with knowledge of the matter said.