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UPDATE 8-Oil slips on worries about Mideast rift, U.S. production growth

* Group of Arab states cuts ties with Qatar

* Kuwait says Qatar still supports OPEC output cuts

* Rising output in U.S., elsewhere offsets OPEC cuts (New throughout, updates prices and market activity)

NEW YORK, June 6 (Reuters) - Oil prices slipped further below $50 a barrel on Tuesday on concerns that an OPEC effort to tighten the market could be coming under pressure from a diplomatic rift in the Middle East and from sustained high inventories in the United States.

Leading Arab powers including Saudi Arabia, Egypt and the United Arab Emirates cut ties with Qatar on Monday, accusing it of support for Islamist militants and Iran.

Surplus oil in many parts of the world and developments with Qatar had traders nervous, even after Kuwait Oil Minister Essam al-Marzouq said Qatar remained committed to restricting crude output under an agreement between OPEC and several non-OPEC suppliers.

"Production growth outside of the areas that have agreed to cut, is still the dominant theme in the market," said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut. He pointed to high levels of crude production in the United States, the North Sea and the potential for rising output from Libya and Nigeria.

Under the latest steps, ships coming from or going to Qatar were barred from docking at Fujairah, in the UAE, which Qatari oil and liquefied natural gas (LNG) tankers use to take on new shipping fuel.

Greg McKenna, chief market strategist at futures brokerage AxiTrader, said he believed there was "a real chance" OPEC solidarity surrounding production cuts might fracture.

Benchmark Brent crude oil was down 29 cents a barrel at $49.18 by 11:18 a.m. EST (1518 GMT), down around 8 percent from its level before OPEC and its non-OPEC allies said they were extending cuts until March 2018. The initial six-month deal to curb output had been due to run till the end of this month. U.S. light crude was down 18 cents at $47.22.

Focus is likely to shift to U.S. inventories ahead of government data Wednesday.

"If we get another drop in U.S. inventory levels, we might begin to see the emergence of some confidence that 1.8 million barrel cuts will tighten inventories," McGillian said.

Qatar produces about 620,000 barrels of crude per day (bpd), making it one of the smallest producers in the Organization of the Petroleum Exporting Countries. Still, some investors fear tension within the cartel could weaken its commitment to hold back production to prop up prices.

Several analysts said these fears were exaggerated.

"The OPEC agreement stands and is highly unlikely to change because of tension with Qatar," said Oystein Berentsen, managing director for oil trading company Strong Petroleum.

(Additional reporting by Henning Gloystein in Singapore and Christopher Johnson in London; Editing by Dale Hudson and David Gregorio)