Oil Drops Below $80 Due to Fears of The New Corona Strain

Brent crude fell by about 4 percent, to less than $ 80 a barrel on Friday, after the discovery of a new strain of the Coronavirus worried investors, which reinforced fears of a ballooning global oversupply in the first quarter of next year after coordinated withdrawals from crude reserves of consumers.

The drop in oil coincides with the decline in the rest of the financial markets due to fears that the new strain will cause a slowdown in economic growth and impose restrictions again.

Brent crude futures continued their decline for the third session, and by 0733 GMT, they fell $3.16, or 3.8 percent, to $79.06 a barrel. West Texas Intermediate crude futures fell $3.45, or 4.4 percent, to $74.94 a barrel.

Attention is also focused on China’s reaction to the announcement by the administration of US President Joe Biden on Tuesday of plans to withdraw millions of barrels of oil from strategic reserves in coordination with other countries of major consumers in an attempt to calm prices.

A source in the Organization of the Petroleum Exporting Countries (OPEC) said that such a move would likely result in an increase in supplies in the coming months, according to the findings of a panel of experts advising OPEC ministers.