Crude prices retreated on Tuesday as tension on the Korean Peninsula and debt problems in the euro- zone stirred worries among investors, Xinhua reported.
Global equity markets were lower after the Republic of Korea and the Democratic People's Republic of Korea on Tuesday exchanged fires in waters off the west coast of the Korean Peninsula.
Meanwhile, contagious fears on the European debt problems were still lingering in the market.
Investors are worrying that global uncertainty would curb energy demand.
Light, sweet crude for January delivery was down 49 cents to settle at 81.25 U.S. dollars a barrel on the New York Mercantile Exchange.
In London, Brent crude lost 71 cents to settle at 83.25 dollars a barrel on the ICE Futures exchange.