Brent crude oil fell on Thursday, touching the lowest level since December, as investors avoided bets on riskier assets with the turmoil in Greece deepening and fears rising of contagion spreading to other stressed euro zone economies.
U.S. crude futures, which earlier rose on hopes that the reversal of the Seaway oil pipeline would help reduce a supply glut at the land-locked delivery point at Cushing, Oklahoma, and on Iran-related issues, fell back into negative territory after the release of a series of weak economic data.
Greece faces new elections on June 17, after inconclusive polls earlier this month left politicians unable to form a government. Whoever emerges as a new leader will have to deal with a country already falling behind on its promises to lenders.
Worries about the health of Spain's banks also resurfaced after a report that customers at Bankia had withdrawn more than 1 billion euros from their accounts in the past week, though the Spanish government said there had been no exit of deposits from the lender.
Oil futures fell as U.S. stock prices edged lower on a crop of weak economic reports and concerns about the euro zone. <.N>
"The oil market, like other risky assets, is within the grips of uncertainty surrounding the euro zone," said Harry Tchilinguirian, BNP Paribas head of commodities strategy.
In London, ICE Brent crude futures for July delivery slipped to a session low of $108.12 a barrel, down $1.63, the lowest intraday price since December 30. By 11:50 a.m. (1550 GMT), it was down $1.31 at $108.44.
U.S. crude fell back to $92.76, down 5 cents, after peaking at $93.88 earlier. On Tuesday, it hit $91.81, its lowest intraday level since November 3.
U.S. crude began paring gains midmorning after the release of the closely-watched Philadelphia Fed business conditions index for the mid-Atlantic region, which dropped to its lowest level since September, while a gauge of U.S. economic activity fell in April for the first time in seven months.
Data showing that weeks U.S. jobless claims were unchanged last week offered no relief as it pointed to sluggish growth in hiring.
Also weighing on oil prices was talk of an emergency stock release. The Kyodo news agency reported on Wednesday that U.S. President Barack Obama had moved to seek support to tap strategic oil reserves from other G8 leaders at a summit this weekend before the European Union's July embargo of Iranian crude.
Earlier, U.S. crude rose to its session high as traders reacted to remarks from the U.S. ambassador to Israel that U.S. plans for a possible military strike on Iran are ready and the option is "fully available," also helped push U.S. crude higher in early trade.
