Brent crude broke through the 200-day moving average after shedding nearly $13 a barrel since the start of August in the first session since Standard & Poor’s cut the United States’ top-tier AAA credit rating.

“In the tumultuous aftermath of the US downgrade from S&P, the world also is downgrading the oil market,” said Phil Flynn, analyst at PFGBest Research in Chicago.

Trading volumes spiked as the sell-off picked up speed late in the day, triggered by a rapid drop off in stock markets that sent the S&P 500 Index down 6 percent in the biggest daily drop since late 2008.

Brent crude dropped $6.56 to $102.81 a barrel by 2:52 p.m. EDT (1852 GMT), breaking strongly below the 200-day moving average of $106.89 a barrel, after pushing through the key technical level during intraday activity on Friday before settling higher.

US crude traded down $5.57 to settle at $81.31 a barrel, the lowest close since Nov. 23.

“We’re watching the $80 area (for US oil) after taking out the morning lows, and the 1,100 area for the S&P 500, but

there is so much uncertainty and fear about a double-dip recession that it’s hard to say we’ll find any support at those

levels,” said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut. 

Investors again flocked to gold as a safe haven, sending prices to a record over $1,700 an ounce, while selling off

other commodities including grains and copper.

The 30-year US Treasury bond’s price jumped more than 3 points.

The S&P downgrade added to concern about demand in the world’s top oil consumer, where gasoline demand for July fell to the lowest level since 2003, according to data from the US Energy Information Administration.

“Investors are looking at the weakness in the stock market as it signals that oil demand will be hurt,” said Joe

Posillico, broker for MF Global in New York City.

Analysts warned oil prices could fall further if a second recession takes hold, but both Merrill Lynch and Goldman Sachs maintained their 2012 price forecasts.

“We believe that WTI crude oil prices could briefly drop to $50 under a recession scenario,” Merrill Lynch said in a note, but it maintained its 2012 average forecast for US crude at $102 a barrel and its forecast for Brent next year at $114.

Technical indicators also suggested the selling may abate.

US oil dropped further below 30 on the 14-day relative strength index, which is often interpreted as a sign a commodity has been oversold. Brent crude again tested the 30 level.

Brent could revisit its Aug. 5 low of $104.30 per barrel, as a medium-term downtrend was expected to develop further, while a bearish target at $81.35 was unchanged for US oil, according to Reuters technical analyst Wang Tao.