New strains of coronavirus found in the UK led to a drop in oil prices on Monday and new travel bans were lifted across Europe, raising concerns that more lockdowns could occur globally.
International benchmark Brent crude fell 2.6% to .9 50.91 a barrel. Major U.S. Crude gauge futures linked to West Texas Intermediate fell 2.8%. 47.74.
While prices turned slightly lower again on the day, the decline from November 6 was the sharpest, and broke the five-season winning streak for both Brent and WTI.
Oil demand is likely to be affected again after a number of countries on Sunday banned travelers from the UK from spreading new strains of Covid-1 of in the UK. The UK government says the new strain appears to be spreading 70% faster than the previous change, and has imposed strict sanctions on parts of the country, including London.
“New types of viruses and new travel restrictions have raised concerns again,” said Norbert R. Carrey, head of inventory research at Julius Bayer..
“It has its pitfalls on the way to normal and this one seems the latest.”
Shares of major European oil companies also fell on Monday. BP PLC 4 .. 4.%, total S.E. fell.7% and the Royal Dutch Shell fell – which on Monday said it had સંપ. billion billion dollars will fall by 5 percent.
The optimism associated with the coronavirus vaccine and the re-use of Chinese economic activity led to a sharp rise in oil prices in recent weeks. Brent reached its highest level since the beginning of March last week.
Despite warnings from the International Energy Agency, the benefit was that it would take several months for vaccinations to begin to boost global oil demand. The IAEA said last week that rising infection levels and fresh sanctions meant that the recovery in crude consumption in some rich European and North American countries was “lagging behind” this quarter, the IAEA said last week.
The recent move by several large countries to cancel flights from the UK has given European oil demand a new tweak. According to Tamas Varga, an analyst at PVM Oil Associates, traders have been betting on rising prices in recent weeks.
Mr Varga said: “I don’t think the market is so depressed yet that people are ready for a short sale, but the recession you see right now is likely to intensify.” Still, the rollout of vaccinations “will probably put the floor under pricing”.
France, Israel and Canada are some of the countries that have banned travelers from Britain in an attempt to keep out the brand new strain of the rapidly spreading coronavirus in England. Photo: Getty Images
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