Oil slips more than 2% as new virus strain sparks demand fears
Oil prices tumbled more than 2% on Monday as a fast-spreading new coronavirus strain that has shut down much of Britain and led to tighter restrictions in Europe sparked worries about a slower recovery in fuel demand.
Brent crude was down $1.85, or 3.5%, at $50.41 a barrel.
West Texas Intermediate (WTI) crude for delivery in January fell $1.36, or 2.77%, to settle at $47.74 per barrel.
The more active February WTI contract fell $1.83, or 3.7%, to $47.41 a barrel.
Both contracts had lost as much as $3 earlier in the session, their biggest daily drop in six months.
Brent climbed above $50 last week for the first time since March, buoyed by optimism stemming from COVID-19 vaccines.
But a new COVID-19 strain, said to be up to 70% more transmissible than the original, has renewed fears about the virus, which has killed about 1.7 million people worldwide.
More countries closed their borders to Britain on Monday, causing travel chaos and raising the prospect of UK food shortages.
The new virus strain has already been detected in other countries, including Australia, the Netherlands and Italy.
Russian Deputy Prime Minister Alexander Novak said the new strain had an impact on oil prices, adding that recovery of global oil markets was happening more slowly than previously expected and could take two to three years.
The negative sentiment overshadowed the rollout of a new vaccine in the United States, a deal among U.S. congressional leaders for a $900 billion coronavirus aid package and European regulatory approval on Monday for the use of the COVID-19 vaccine jointly developed by U.S. company Pfizer and its German partner BioNTech.
The approval by Europe’s medicines regulator puts the region on course to start inoculations within a week.
Reference: CNBC
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