SULAIMANI (ESTA) — Oil prices dropped over 2% on Monday as a fast-spreading new coronavirus strain that has shut down much of the United Kingdom fueled worries over a slower recovery in fuel demand amid tighter restrictions in Europe.
Brent crude slid $1.42, or 2.72%, to $50.84 a barrel by 0557 GMT after rising 1.5% and touching its highest since March last Friday.
U.S. West Texas Intermediate (WTI) crude was down $1.35, or 2.75%, to $47.75 a barrel after also climbing 1.5% on Friday to its highest level since February.
Monday’s declines came after oil prices marked seven straight weeks of gains last week as investors focused on the rollout of COVID-19 vaccines.
“A tougher lockdown in Britain to fight a new strain of coronavirus and travel restrictions in other European countries led funds to unwind their long positions,” said Chiyoki Chen, chief analyst at Sunward Trading, adding concern over dragging Brexit talks also dented market sentiment.
“Brent may fall below $50 a barrel and WTI may drop below $45 this week as investors want to adjust positions ahead of Christmas holidays,” Chen said.
British Prime Minister Boris Johnson will chair an emergency response meeting on Monday to discuss international travel and the flow of freight in and out of Britain as COVID-19 cases surged by a record number for one day. The headache comes as Johnson also seeks to hammer out a final accord on Brexit.
The variant, which officials say is up to 70% more transmissible than the original, also prompted concerns about a wider spread, forcing several European countries to begin closing their doors to travelers from the United Kingdom.
(Esta Media Network/Reuters)
