UPDATE 9-Oil drops to lowest since Aramco attacks after Trump scolds China

* Trump criticizes China's trade practices, won't take 'bad
deal'
* S&P 500 hits two-week low on Trump impeachment call
* Manufacturing activity shrinks in Europe, Japan
* U.S. crude inventories expected to have dropped last week
-poll
* API data shows unexpected 1.4 mln-bbl build

(Adds API report, reaction)
By Collin Eaton
HOUSTON, Sept 24 (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
Some analysts expect U.S. crude stocks to remain low after a
Tropical Storm Imelda disrupted energy operations on the Gulf
Coast last week. They also expect U.S. crude exports to increase over coming
weeks after the attack on Saudi Arabia's largest oil-processing
facility that halved output in the world's top oil exporter.
State oil company Saudi Aramco is buying oil originating in
neighbouring countries to meet its supply obligations to foreign
refineries, sources familiar with the matter told Reuters. Its
trading arm is arranging for crude from the United Arab Emirates
and Kuwait to cover its commitments to certain buyers, the
sources said. European powers - Britain, Germany and France - backed the
United States in blaming Iran for the Saudi attack, urging
Tehran to agree to new talks with world powers on its nuclear
and missile programmes and regional security.
At the U.N. General Assembly, Trump denounced Iran, but said
there is a path to peace, which somewhat eased the oil market's
worries about geopolitical risks, analysts said. "So far, it doesn't look like there will be a military
response," said Phil Flynn, an analyst at Price Futures Group in
Chicago.