* Brent dips below $120 for first time since early April
* OPEC official says oil will not go below $100 this year
* Greek debt default concerns underline euro zone problems
(Updates throughout)
By Jessica Donati and Caroline Copley
LONDON, April 19 (Reuters) - Brent crude oil fell on
Tuesday, slipping below $120 a barrel for the first time in two
weeks, pressured by concern about the economic outlook and that
high prices could erode demand.
Expectations Greece would be forced to restructure its debt
added to a bleak economic picture on Tuesday, a day after
ratings agency S&P cut its outlook for U.S. credit.
ID:nLDE73H17X]
Brent crude <LCOc1> for June fell $1.75 to $119.86 a barrel
by 1100 GMT, trading on Tuesday below $120 for the first time
since April 5. U.S. crude <CLc1> for May, which expires later on
Tuesday, was down 99 cents at $106.13.
"I think essentially there's been no new oil-related stories
and what you are trading off is macroeconomic stories... so
that's weighing on the market," said Amrita Sen at Barclays
Capital.
OPEC Secretary General Abdullah al-Badri, speaking at an oil
and gas trade fair in Tehran, said he did not expect oil to fall
below $100 this year, even though there was no shortage in the
market.
He reiterated OPEC's call on consumer nations to revise
their tax systems to address what he called "exceptional
circumstances," so as to lessen the burden of high prices.
[]
The Organization of the Petroleum Exporting Countries has so
far declined to take any formal action to cool oil's rally.
Underlining that stance, Iran's oil minister said on Tuesday any
increase in output would not bring down prices. []
Top world exporter Saudi Arabia said over the weekend it had
cut oil production by 800,000 barrels per day (bpd) in March,
returning output to December levels, because of weak demand.
ECONOMY CONCERNS
Oil also fell on Monday after ratings agency S&P revised
lower its U.S. credit outlook to negative.
In Europe, financial markets are increasingly convinced
Greece will have to renegotiate the terms of its public debt,
recognising that its economy cannot grow fast enough to service
a burden that is set to swell to 160 percent of national output.
"I guess they're all worried about the economic outlook...
the downgrading of U.S. debt and the Euro zone with Portugal and
now they're worried about Greece... that seems to be the main
thing," said Roy Jordan at Facts Global Energy.
Concerns about how China's attempts to slow economic growth
could impact oil demand, as well as high crude inventories in
top consumer the United States, were also pressuring oil prices.
"You have to start readjusting the value of the commodity,"
Jonathan Barratt, managing director of Commodity Broking
Services in Melbourne said. "All the pressure points that we had
before are not there."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Sovereign credit risk graphic:
http://r.reuters.com/dys98r
S&P cuts U.S. credit outlook: http://r.reuters.com/cys98r
More on Middle East unrest: [] []
Libya Graphics http://link.reuters.com/neg68r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Unrest in the Middle East remained a potential threat to
supply as fighting escalated in Syria on Tuesday, while tension
in Bahrain continued to require the presence of Saudi and UAE
forces there. [] []
In Libya, which pumped 1.6 million bpd or almost 2 percent
of world supply before the conflict, oil trade remains at a
virtual standstill. []
"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."
(Editing by Alex Lawler and James Jukwey)
