The spread of the new strain COVID-19 is lowering oil prices

BY CHIKA IZUORA

Oil prices fell yesterday, widening sharp losses overnight as the rapid spread of a new strain of the new coronavirus in the UK forced several countries to close their borders to British travelers.

After that, U.S. futures for West Texas (WTI) fell 30 cents, or 0.6 percent, to $ 47.67 a barrel, while Brent oil futures fell 26 cents, or 0.5 percent, on $ 50.65 per barrel.

Both reference contracts slipped nearly 3 percent on Monday, partially erasing recent strong gains on the introduction of the COVID-19 vaccine, which are considered key to easing mobility restrictions.

After the UK government warned that the new variant of the virus appears to be spreading much faster than previous species, India, Pakistan, Russia, Jordan and Hong Kong have joined European countries in stopping travel from Britain, and Saudi Arabia, Kuwait and Oman they closed their completely bordering.

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“The nightmare began before the Christmas scenario, with a combination of a ‘mutating virus’ made up of Brexit ang,” said Axi chief market strategist Stephen Innes, referring to doubts about whether British Prime Minister Boris Johnson could secure a position -Brexit trade deal with European Union.

Innes said the oil market was overbought and long positions outperformed short positions by about 4 to 1, so sales were inevitable.

With the rise of the U.S. dollar as a safe currency, oil at the price of the U.S. dollar is less attractive to buyers holding other currencies, which has increased pressure on oil prices.

“The lower risks are higher than up until we better understand how politicians will react in 2021 – whether they will lock things up again,” Innes said.

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