Oil prices skid as new coronavirus strain fuels demand worries | Reuters

Oil prices skid as new coronavirus strain fuels demand worries | Reuters

Oil prices dropped more than 3% on Monday, as a fast-spreading new coronavirus strain that has shut down much of Britain and led to tighter restrictions in Europe fuelled worries about a slower recovery in fuel demand.

Brent crude slid $1.74, or 3.3%, to $50.52 a barrel by 0745 GMT after rising 1.5% to its highest since March on Friday. U.S. West Texas Intermediate (WTI) crude was down $1.66, or 3.4%, to $47.44 a barrel after also climbing 1.5% on Friday to its highest since February.

Monday’s declines come after seven weeks of gains in prices amid optimism stemming from the rollout of COVID-19 vaccines.

“The oil market has been on a bull trend in the past month or so, ignoring negative factors, amid an optimism that a widening vaccine rollout would revive global growth,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.

“But investors’ rosy expectations for 2021 have suddenly vanished due to a new variant of the virus.”