NEW YORK, May 16 (Xinhua) -- The U.S. crude price dipped further on Wednesday and settled under 93 dollars a barrel for the first time since Nov. 2, as concerns over Greece lingered and U.S. crude inventories rose to the highest level since 1990.
Greece still weighed on the crude markets with politicians in Athens failing to form a new government. The debt-ridden European country was forced to leave its fate to a caretaker government and had to await a new vote scheduled for next month. Political uncertainties raised questions about the country's solution to its debt problems. Speculations of Greece's exit from the eurozone kept rising and led to a large-scale deposit outflow from Greek banks since Monday.
Although German Chancellor Angela Merkel said she wanted Greece to stay in the eurozone, trying to comfort the nervous market, and Greek sources said the bank withdrawals slowed down on Wednesday, the fact that Greek banks experienced 700 million euros (about 890 million U.S. dollars) worth of withdrawals on Monday alone still worried the investors and caused risk aversion.
Besides, there was a report saying that the European Central Bank had stopped providing liquidity to some Greek banks as they were severely undercapitalized. Crude and other commodity prices further declined after the news.
Adding to the pressure, the Energy Information Administration said that U.S. crude stocks added 2.1 million barrels to 381.6 million barrels in the week ended May 11. It is higher than the median forecasts and represents the highest level of U.S. crude inventories since 1990.
Meanwhile, due to the Greece concerns, the euro dipped further against the U.S. dollar after having hit a four-month low. A stronger dollar gave more pressure to the crude prices.
But the market sentiment was boosted a little after the U.S. government said housing starts rebounded in April from a five- month low. And the Federal Reserve reported that industrial production rose 1.1 percent in April, the fastest growth in over a year.
Analysts said that market volatility would continue and could worsen if geopolitical factors came back to the markets.
Light, sweet crude for June delivery slipped 1.17 dollars, or 1. 24 percent, to settle at 92.81 dollars a barrel on the New York Mercantile Exchange, after trading between 91.81 dollars and 94.16 dollars. In London, Brent crude for June delivery also declined and last traded around 111 dollars a barrel.