Oil price ignores Mideast tensions, slumps towards 11-year low

Oil prices dropped over 2 percent towards its 11-year low on Tuesday, as traders shrugged off growing tensions between two of the world’s biggest oil producers and focused instead on a stronger U.S. dollar and swelling U.S. crude inventories, Reuters reports.

Relations between Saudi Arabia and Iran collapsed in acrimony this week after the Kingdom’s execution of a Shi’ite cleric set off a storm of protests in Tehran. But instead of fanning fears of a disruption in supplies, however, some delegates from the Organization of the Petroleum Exporting Countries (OPEC) said the rift could exacerbate oversupply concerns by quashing already faint hope that OPEC could one day agree to cut output.

Brent crude prices fell 80 cents to settle at $36.42 a barrel. Prices hit an 11-year low of $35.98 a barrel just before Christmas, capping a year where the benchmark’s value dropped by more than a third. U.S. West Texas Intermediate (WTI) crude slipped 79 cents to settle at $35.97 a barrel.