Oil Falls On New Strain of Coronavirus

Oil prices incurred more losses today, Tuesday, which add to the sharp losses from the previous session, as a new strain of the emerging corona virus in Britain raises concerns about a recovery in fuel demand.

The fast-spreading new strain of the Corona virus caused the closure of most areas of Britain, and prompted a number of countries to close their borders to travelers and shipments from Britain.

Brent crude futures were down 54 cents, or 1.1%, to $ 50.37 a barrel, while U.S. West Texas Intermediate crude futures were down 59 cents, or 1.2%, to $ 47.38 a barrel.

Both record contracts fell by about 3% on Monday, erasing part of the strong gains they made on the back of the distribution of Covid-19 vaccines, which is considered one of the main factors for easing restrictions on movement.

After the British government warned that a new strain of the virus appears to spread much faster than the previous types, India, Pakistan, Russia, Jordan and Hong Kong joined European countries in suspending travel from Britain, and Saudi Arabia, Kuwait and Oman closed their borders completely.

With the increase in the US dollar as a safe haven currency, oil priced in dollars also became less attractive to buyers than holders of other currencies, which added to the pressure on prices.