LONDON (Dow Jones)--Crude futures were sharply lower Monday, taking cues from falling equity markets as investors continued to digest the impact of Standard & Poor's downgrade of the U.S.'s credit rating over the weekend. At 0935 GMT, the front-month September Brent contract on London's ICE futures exchange was $2.92, or 2.7%, lower at $106.45 a barrel. The front-month September contract on the New York Mercantile Exchange was trading down $2.80, or 3.3%, at $84.08 per barrel. S&P's downgrade of its U.S. debt rating to AA+ from AAA late Friday underscored concerns in the market that U.S. oil demand is slowing, although analysts said the focus could soon shift away from S&P's actions. "We suspect the "S&P salvo" will be relatively short-lived, perhaps lasting through late Monday or Tuesday before some short-term bargain hunting sets in," said MF Global in a note. For one thing, markets may have already priced in a downgrade given the warnings that have been coming out of the agencies for some time. Still, wider concerns over the health of the global economy and demand for crude oil are likely to continue to weigh on prices. "The S&P downgrade did not help sentiment, but we should have been under pressure even without it," said Olivier Jakob, managing director of Swiss consultancy Petromatrix. Recent data out of the U.S. and China, the world's two largest energy consumers, have shown that oil demand growth is stalling, while the euro-zone economy is also seen stumbling. At 0935 GMT, the ICE's gasoil contract for August delivery was down $12.25, or 1.3%, at $900.25 per metric ton, while Nymex gasoline for September delivery was 669 points, or 02.4, lower at $2.7383 per gallon. -By Sarah Kent, Dow Jones Newswires; 4420-7842-9376; sarah.kent@dowjones.com

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