[ad_1]
LONDON: Oil prices fell on Monday as a new, fast-spreading strain of coronavirus that has shut down much of Britain and prompted tighter restrictions in Europe raised concerns about a slower recovery in fuel demand.
Brent crude was down $ 2.23, or 4.3%, to $ 50.03 a barrel at 1308 GMT, while U.S. West Texas Intermediate (WTI) crude was down $ 2.10, or 4 , 3%, at $ 47.00 a barrel.
Both contracts had dropped more than $ 3 earlier in the session, their biggest daily drop in 6 months.
“Reports of a new strain of coronavirus have weighed on risk sentiment and oil. New mobility restrictions in Europe are not helping either, as European oil demand will suffer,” said UBS oil analyst Giovanni Staunovo .
“Investors should be aware that the road to higher oil demand and prices will remain bumpy,” he added.
Brent rose above $ 50 last week for the first time since March amid optimism stemming from the launch of COVID-19 vaccines.
But a new strain of COVID-19, said to be up to 70% more transmissible than the original, has sparked renewed fears about the virus that has killed around 1.7 million people worldwide.
More countries closed their borders to Britain on Monday, causing travel chaos and raising the outlook for food shortages in the UK.
“The new strain of coronavirus in the UK has shown us that vaccine optimism keeping Brent above $ 50 a barrel could deflate in a fleeting moment,” said Louise Dickson, an analyst at Rystad Energy.
The new strain of the virus has already been detected in other countries, including Australia, the Netherlands and Italy.
Russian Deputy Prime Minister Alexander Novak said the new strain of the virus had an impact on oil prices, adding that the recovery in global oil markets was occurring more slowly than expected and could take two to three years.
The negative sentiment completely overshadowed a weekend agreement between the leaders of the US Congress for a $ 900 billion coronavirus aid package and the launch of a new vaccine in the United States on Saturday.
Adding to the pressure, the U.S. oil and gas rig count, an early indicator of future production, rose by eight to 346 in the week through Dec. 18, the highest since May, Baker Hughes said. , which reflects crude prices that have traded above $ 45 per year. barrel since the end of November. – Reuters
[ad_2]
