Oil prices decline amid supply glut

New York: Oil prices retreated on Monday as the supply glut overweighed geopolitical tensions in Middle East.

Crude prices moved up in the morning section after Saudi Arabia cut off its diplomatic relations with Iran, fuelling fears that the flare-up of tensions could disrupt oil supplies of the two important oil exporters in the Middle East, Xinhua news agency reported.

The market, however, later pared early gains as worries about a global supply glut started to weigh on the market.

Saudi Arabia severed diplomatic ties with Iran on Sunday after angry Iranian protesters stormed the Saudi diplomat mission to protest the Saudi execution of 47 individuals on terrorism charges, including Saudi Shiite cleric Nemer Baqar Al-Nemer.

The West Texas Intermediate for February delivery moved down 28 cents to settle at $36.76 a barrel on the New York Mercantile Exchange, while Brent crude for February delivery decreased 6 cents to close at $37.22 a barrel on the London ICE Futures Exchange.