Oil prices fell 2% on Tuesday as U.S. President Donald Trump fanned market fears that Sino-American trade tensions are far from settled amid ongoing negotiations, a grim sign for oil demand growth. Trump sharply criticized what he called China’s unfair trade practices in a speech at the United Nations General Assembly, saying he would not accept a “bad deal” between the United States and China. “He 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.”

Brent Crude fell $1.35, or 2%, to $63.42 a barrel. WTI Crude were down $1.12, or 1.9%, at $57.52 a barrel. “Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping technology transfers and the theft of intellectual property and also trade secrets on a grand scale,” Trump said.

U.S. stocks fell, as well, reversing earlier gains following Trump’s comments and a private sector report showing 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 barrels per day (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.

Oil prices have remained at comparatively elevated levels for the year in the wake of the Sept. 14 attack on Saudi Arabia’s largest oil-processing facility that halved output in the world’s top oil exporter. Reuters reported on Monday that Saudi Arabia had restored more than 75% of crude output lost after attacks on its oil installations and would return to full volumes by early next week. But the Wall Street Journal said repairs at the plants could take months longer than anticipated. State-run oil company Aramco has stepped up purchases of products such as naphtha, gasoline and diesel from Europe and elsewhere.

Aramco is also buying oil originating in neighboring 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 programs 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.

Meanwhile, an extended Reuters poll forecast U.S. crude stockpiles were expected to have dropped last week.The poll was conducted ahead of inventory reports from the American Petroleum Institute, an industry group, to be released on Tuesday at 4:30 p.m. EDT and from the U.S. government’s Energy Information Administration on Wednesday.