* S&P revises U.S. credit outlook to negative
* OPEC warns high prices could hurt demand
* Ongoing MidEast, N. Africa tension lends support
(Updates prices)
By Seng Li Peng
SINGAPORE, April 19 (Reuters) - Brent and U.S. crude futures
extended losses on Tuesday after ratings agency S&P revised its
U.S. credit outlook to negative, adding to bearish sentiment
amid concerns that high oil prices could hamper demand and blunt
economic growth.
OPEC ministers warned on Monday that costly oil could strain
consumers' economies, a day after top oil exporter Saudi Arabia
said it reduced output in March because of lack of demand.
Consumers have already warned that rising energy costs would
hurt consumption.
ICE Brent crude <LCOc1> for June fell 15 cents to $121.46 a
barrel by 0718 GMT, while May U.S. crude <CLc1> slipped 25 cents
to $106.87 a barrel.
S&P on Monday maintained the U.S.'s top AAA credit rating,
but said there was a risk U.S. policymakers may not reach
agreement on a plan to slash the huge federal budget deficit.
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"S&P is just one factor. The market's focus is on OPEC
saying that this is too much crude oil," said Jonathan Barratt,
managing director of Commodity Broking Services in Melbourne.
Concerns about how China's attempts to slow economic growth
could impact crude demand, as well as high crude inventories in
top consumer the United States, were also putting pressure on
crude, Barratt said.
"You have to start readjusting the value of the commodity,"
he said. "All the pressure points that we had before are not
there."
On Sunday, Saudi Oil Minister Ali al-Naimi said the kingdom
had cut output by more than 800,000 barrels per day (bpd) in
March because of weak demand. []
Nobuo Tanaka, executive director of the International
Energy Agency, on Monday said that if oil prices remained around
current levels, they could trigger a recession similar to that
which began in 2008, when oil prices hit a record of nearly $150
a barrel before collapsing to less than $40.
"Already we are seeing some indication of the slowdown in
demand, and it's alarming," Tanaka told Reuters. []
TENSIONS COULD HURT AGAIN
The potential for unrest to disrupt more output in the
Middle East and North Africa supported prices. Libya's output
has been cut as the country fights a civil war.
"The tension does not seem to be getting any better," said
John Vautrain of consulting firm Purvin & Gertz. "And we've now
got some growing tension between Iran and Saudi Arabia. Brent
still could go up in the next week or two."
Relations between the two major Gulf powers and OPEC's top
two producers have been strained by anti-government
demonstrations in Bahrain which neighbour Saudi Arabia helped
put down by sending in troops to bolster Bahraini forces.
A Saudi minister urged Iran on Monday to protect Saudi
diplomats in the Islamic republic and threatened unspecified
measures if it failed to do so, after Iranian students
demonstrated outside the Saudi embassy in Tehran over the Saudi
role in Bahrain. []
In Libya, NATO bombing has damaged Gaddafi's armour but was
not enough to break the stalemate, and the alliance may have no
choice but to use naval gunfire or helicopters, analysts said --
the latter vulnerable to ground fire by Gaddafi's troops.
[]
(Reporting by Seng Li Peng; Editing by Clarence Fernandez and
Simon Webb)
