Crude prices slipped on Thursday as hopes for the U.S. Federal Reserve's stimulus measures faded, offsetting the supportive effects from China's rates cut and Spain 's bonds meeting strong demand.

While testifying before Congress on Thursday about U.S. economy, Federal Reserve Chairman Ben Bernanke said the Fed was monitoring "significant risks" caused by European debt and banking crisis on the U.S. economic recovery.

"Despite economic difficulties in Europe, the demand for U.S. exports has held up well," he said. About the highly anticipated monetary easing policy, Bernanke didn't give any concrete hints. This dampened investors' hopes, which triggered crude prices' declines.

But the crude prices rose in the earlier trading as China surprisingly cut its interest rates by 25 basis points in an effort to preventing the world's second largest economy from further slowing down.

And in Spain, the bonds auction met strong demand, showing markets still had confidence in Spain's fiscal health despite the ongoing banking crisis.

On the economic front, U.S. initial jobless claims fell 12,000 last week, according to the Labor Department. It was the first weekly decline since April, which also offered some supports to crude prices.

And the closely watched Iran nuclear talks were making less progress. Ahead of the scheduled Moscow talks, relationship between Iran and the six powers tended to be unstable.

On July 1, an EU embargo on Iran's oil exports will take in effect, which will lead to a reduction in supplies, and therefore will be favorable to boosting crude prices.

Light, sweet crude for July delivery fell 20 cents, or 0.24 percent, to settle at 84.82 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for July delivery declined 71 cents, or 0.71 percent, to close at 99.93 dollars a barrel.