Oil Continues Dipping on Greek Woes, U.S. Manufacturing Contraction

NEW YORK, May 17 (Xinhua) -- Crude prices continued dipping on Thursday as Greek woes kept pressuring on the demand outlook and a U.S. regional manufacturing data came in sharply contracting.

The U.S. crude rose in the earlier trading session as the reversal of Seaway pipeline eased inventories pressure at the WTI delivery point in Cushing, Oklahoma. But it pared gains and turned to decline after a series of weak data.

The Philadelphia Fed's closely-watched manufacturing report for the mid-Atlantic region pointed to a sharp contraction in May. The business activity index came in negative, at minus 5.8 from plus 8. 5 in April, hitting the lowest level since September.

The Labor Department said the initial jobless claims remained unchanged in the week ended May 12. As speculation about a sluggish hiring growth in the United States rose, the report provided no relief for the nervous investors.

In Europe, the Greek woes kept weighing on the crude markets. After the efforts to form a coalition government in Greece fell apart, a new vote will be forced to emerge in June. And there was a high possibility that Greece could not honor its commitments on the austerity plans and have to leave the currency union. Discussions about Greek exit from euro zone weighed heavily on the financial markets.

Besides, Moody's was prepared to cut ratings for a large number of Spanish banks, and questions about health of Spain's financial system resurfaced. Massive withdrawals from Spain's large banks were reported and worried the investors.

Light, sweet crude for June delivery slipped 25 cents, or 0.27 percent to settle at 92.56 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for July delivery also declined and last traded around 108 dollars a barrel.