US crude slipped by over $2 to stand at $83.68 a barrel today as credit rating agency Standard & Poor’s downgraded the US’s top-tier credit rating.

The credit downgrade to AA-plus raised concerns about the outlook for demand from the world’s biggest oil consumer.

Brent crude dropped to $106.54 a barrel over fears that Europe is unable to prevent its debt crisis from spreading.

In an effort to calm investors, the Group of Seven major industrialised nations expressed trust in US Treasuries and steps by the European Central Bank to halt financial market contagion, according to Reuters.