UPDATE 8-Brent up but buffeted by supply, economic fears

* S&P lowers Greece long-term credit rating, pressures oil

* Shell Nigeria Bonny Light force majeure supports Brent

* Brent premium to U.S. crude hits record above $21/bbl

* Coming up: API oil data, 4:30 p.m. EDT Tuesday

* For news from the Reuters Global Energy and Climate

Summit:

http://www.reuters.com/summit/GlobalEnergy11?pid=500

(Recasts, updates prices, market activity)

By Robert Gibbons

NEW YORK, June 13 (Reuters) - Brent edged up while U.S. crude fell on Monday in volatile trading after a downgrade of Greece's credit rating fed jitters about economic growth and oil supply interruptions buffeted energy markets.

Brent pared gains and briefly turned lower, while U.S. crude extended losses after Standard & Poor's Ratings Services cut its long-term sovereign credit ratings on Greece and put the outlook at negative. [ID:nN13126859] [ID:nN13184836]

Brent's premium to U.S. crude rose more than $2 to a record above $21 a barrel. The gap set a series of record highs last week as traders pointed to prolonged loss of Libyan output and curbed supplies of North Sea Forties crude.

A fresh catalyst emerged on Monday when Royal Dutch Shell declared force majeure on its Nigerian Bonny Light crude oil loadings for June and July. Shell blamed production cutbacks caused by leaks and fires on its Trans-Niger Pipeline. [ID:nLDE75C14Q]

Concern about slower economic growth had pressured U.S. crude even before the Greece ratings downgrade. Ample domestic inventories, especially at the Cushing, Oklahoma, oil hub, also have weighed on U.S. crude prices.

Brent crude for July delivery rose 38 cents to settle at $119.10 a barrel, off its session peak of $120.25, a five-week high.

U.S. July crude fell $1.99 to settle at $97.30 a barrel, having slumped as low as $96.13, nearing its 150-day moving average and the lowest intraday price since May 20.

U.S. refined products ended mixed. Both heating oil and gasoline got an early lift from the strong Brent contract, which has pushed U.S. domestic sweets like Light Louisiana Sweet to big differentials above the benchmark U.S. light sweet crude contract. [ID:nN13110417]

"Fundamentally, the market is still expressing concerns over weak U.S. macroeconomic guidance ...," Jim Ritterbusch, president at Ritterbusch & Associates in Galena Illinois, said in a note.

U.S. equities also ended mixed. Stocks found some support when investors hunted bargains following six straight weekly declines, but the Greece ratings news pushed equities lower intraday. [.N]

The dollar index <.DXY> was weaker and the greenback fell against the euro even as Europe's single currency fell to a record low against the Swiss franc, as worries about Greece boosted the safe-haven allure of the franc. [USD/]

SUPPLY THREATS LIFT BRENT

"While in the short term, markets appear well supplied, the current very high Brent prices reflect rising geopolitical risk and possible tensions on world supply-demand balances in the future," said Christophe Barret, global oil analyst with Credit Agricole.

Libya's civil war has shut most production, estimated at around 1.6 million barrels per day ahead of the current conflict, since February.

In the Middle East, Saudi Arabia's neighbor Yemen remains in turmoil. Efforts to broker an exit for Yemen President Ali Abudullah Saleh after months of protests and a round of open warfare in the capital were deadlocked. [ID:nLDE75C11L]

Syria continues to react violently to dissent and the White House on Monday said it condemned in the "strongest possible terms" the latest violence by the Syrian government in its crackdown on pro-democracy protests. [ID:nWEN4258] [ID:nLDE75C0H6] (Additional reporting by Ikuko Kurahone in London and Alejandro Barbajosa in Singapore; Editing by David Gregorio)