Brent slips below $124 after rally, supply woes support

>

* S&P cuts Greece's long-term ratings to 'selective default'

* Brent to revisit a high of $125.55/bbl -technicals

* Coming Up: U.S. consumer confidence Feb; 1500 GMT

By Manash Goswami

SINGAPORE, Feb 28 (Reuters) - Brent crude futures extended losses and slipped below $124 on Tuesday, snapping a surge that threatened to hurt the global economy while concerns over supply from the Middle East helped stem the slide.

Broader financial markets consolidated after sliding on fears that the rise in oil to near 10-month highs last week would further strain the economies of Europe, already struggling with a debt crisis.

Front-month Brent fell 47 cents to $123.70 a barrel by 0252 GMT, after settling more than $1 lower. U.S. crude slipped 64 cents to $107.92 a barrel, also ending more than $1 lower and snapping seven straight days of gains.

"People were worried about the quick move in prices - they just sped up too fast," said Tetsu Emori, a fund manager with Astramax Co. in Tokyo.

"We may see some more correction and participants repositioning themselves before prices start to rise again."

Brent crude has risen more than 11 percent this month, in addition to a more than three percent increase in the previous month, levels that have prompted the International Monetary Fund to flag oil prices as a rising threat to the global economy.

Brent may slip to $120 a barrel, while U.S.

"crude slipped 64 cents to $107.92 a barrel, also ending more than $1 lower and snapping seven straight days of gains."People were worried about the quick move in prices - they just sped up too fast," said Tetsu Emori, a fund manager with Astramax Co"crude may fall to $105 before finding support, Emori said. Oil may rise further after the correction as tensions with the West over Tehran's disputed nuclear programme continue to escalate, he said.

"There has been no change. In fact, the fundamentals are getting much more tighter," said Emori.

Brent is expected to revisit the Feb. 24 high of $125.55 per barrel, as it could have completed a correction from this level, while U.S. oil may drop more to $106.26 per barrel, as the retracement from the Feb.

24 high of $109.95 has not completed, according to Reuters market analyst Wang Tao.

Standard & Poor's on Monday cut Greece's long-term ratings to 'selective default', the second ratings agency to proceed with a widely expected downgrade after the country announced a bond swap plan to lighten its debt burden.

Greece is proceeding with scheduled steps to restructure its huge debts, setting a March 8 deadline for private holders of its bonds to participate in an unprecedented bond swap.

Crude is also under pressure from expectations that stockpiles at the world's biggest oil consumer, the United States, rose for a second straight week due to higher imports.

Analysts called for a build of 1.4 million barrels in crude stocks for the week of Feb. 24, with five out of six analysts polled predicting a build, according to a Reuters poll (Editing by Miral Fahmy)

Energy Related Quotes and News Company Price Related News