UPDATE 11-Oil slumps on Goldman warning, demand fears

                                
 * Brent seen down at $105 in "coming months" - Goldman
                                
 * IEA says high prices slowing growth in oil demand
                                
 * Coming up: API oil inventory data, 4:30 p.m. EDT Tuesday
 (Recasts, updates prices, adds detail)
                                
 By Robert Gibbons
                                
 NEW YORK, April 12 (Reuters) - Crude fell more than $3 on
Tuesday as Goldman Sachs warned again of a price reversal and
key forecasters said expensive oil could erode demand.
                                
 Oil extended its retreat from 32-month peaks reached early
on Monday, with U.S. crude's 5.8 percent drop from Friday the
biggest two-day percentage loss since May 2010, when the Greek
and wider euro zone debt crises pressured commodities.
                                
 Oil led a broad commodities slump that saw the
Reuters-Jefferies CRB index <.CRB> post its sharpest one-day
decline in a month, partly undermined by an upgrade in the
severity of Japan's nuclear crisis that rattled risk appetite.
[ID:nWEN0943] [COM/WRAP]
                                
 The industry group the American Petroleum Institute will
release its oil data at 4:30 p.m. EDT (2030 GMT).
                                
 Brent crude for May <LCOc1> fell $3.06 to settle at $120.92
a barrel. The May Brent contract expires on Thursday.
                                
 U.S. May crude <CLc1> fell $3.67 to settle at $106.25.
                                
 "Fear of demand destruction is killing this market. There
is a feeling that the recent rally lifted oil prices to
unsustainable levels," said Phil Flynn, analyst at PFGBest
Research in Chicago.
                                
 Sentiment was also diminished after two Saudi Arabia-based
sources told Reuters that a lack of customer demand had forced
the kingdom to throttle back production after a sharp increase
in March to offset lost Libyan crude. [ID:nLDE73B1J0]
                                
 U.S. oil prices rallied above $113 on Monday, having jumped
from an $83.85 low on Feb. 15 in the wake of the ouster of
Egypt's government and with unrest just beginning to spread in
the region before engulfing Libya in a civil war.
                                
 In its second report in as many days, Goldman Sachs <GS.N>
urged investors to book profits, and traders said many did.
                                
 Goldman expects Brent to fall toward $105 in coming months,
the bank said in a note emailed to clients, after recommending
on Monday that they close its trade on a basket of commodities
that included U.S. crude. [ID:nN12164096] [ID:nLDE73B02E]
                                
 Weekly oil inventory reports will offer a fresh snapshot of
U.S. demand and stockpiles. Analysts surveyed on Tuesday
expected crude stocks to have risen last week, with distillate
stocks also up slightly and gasoline stocks lower. [EIA/S]
                                
 DEMAND CONCERNS
                                
 High prices are beginning to dent oil demand growth,
Western consuming nations' energy policy adviser the
International Energy Agency said. Slowed economic growth could
cause prices to correct, the IEA said. [ID:nLDE73B0MO]
                                
 OPEC kept its 2011 oil demand forecast steady in its
monthly report, but said the group saw a risk that higher oil
prices could dent demand for transport fuel. [ID:nL9E7F700M]
                                
 A slightly higher demand growth forecast for 2011 came from
the U.S. Energy Information Administration, but the EIA lowered
its forecast of 2012 demand growth. [ID:nWNA5990]
                                
 U.S. retail gasoline demand fell last week, with the
four-week average down against the year-ago period in a
reaction to sharp gains in pump prices, according to MasterCard
Advisors' SpendingPulse weekly report. [ID:nEGE7DB018]
                                
 Saudi Arabia pointing to slow demand as a factor in
deciding to reverse its recent output hike was treated by
investors as another sign of slack consumption.
                                
 Sources said Saudi Arabia had trimmed production by around
500,000 barrels per day to around 8.5 million bpd due to slow
demand. [ID:nLDE73B0TH]
                                
 Demand in Japan remains in question as economic damage from
last month's earthquake and tsunami is likely to be worse than
first thought, the country's economics minister warned.
[ID:nL3E7FC092]
                                
 SUPPLY THREATS
                                
 Threats to supply remained as Libya's conflict continued,
as did opposition to current regimes in Yemen, Syria and other
countries in the region.
                                
 France and Britain urged NATO to do more to stop Muammar
Gaddafi's forces from bombarding civilians in Libya, even as
Qatar said it had marketed 1.0 million barrels of crude on
behalf of Libyan rebels. [ID:nLDE73A2B7] [ID:nLDE73B22K]
 (Additional reporting by David Sheppard and Gene Ramos in New
York, Ikuko Kurahone, Dmitry Zhdannikov and Zaida Espana in
London and Chikako Mogi and Risa Maeda in Tokyo; Editing by
Dale Hudson)