Crude prices registered their steepest daily drop since July on Friday, as a new variant of Covid-19 scared investors and added to concerns about a supply surplus that could increase in the first quarter.
Oil was plummeting alongside world stock markets fearing that the variant, which the UK said scientists regard as the most significant found to date, could restrict travel and slow economic growth and demand for fuel.
At 10:13 GMT, crude Brent plummeted $ 4.44, or 5.40%, to $ 77.87 a barrel, while the West Texas Intermediate in the United States (WTI) it lost 4.93 dollars, or 6.31%, to 73.43 dollars a barrel, after hitting a two-month low during the session. On Thursday the WTI was not negotiated for the holiday of the Thanksgiving Day.
Investors were also on the lookout for China’s response to the US release of millions of barrels of oil from its strategic reserves in coordination with other major consuming nations, as part of an initiative to cool prices.
A release of this nature is likely to boost supplies in the coming months, said a source from the OPEC, based on the findings of an expert panel advising the ministers of the Organization of Petroleum Exporting Countries.
“OPEC’s initial assessment of the coordinated release (of stocks) and the sudden appearance of a new variant of the coronavirus raises serious concerns about economic growth and the oil balance in the coming months,” said Tamas Varga, an analyst at PVM.
Iranian production was also in the spotlight, as indirect talks between Iran and the United States on the reactivation of a 2015 nuclear deal that could lead to the lifting of US sanctions on Tehran’s oil exports will resume on Monday. .
However, the fact that Iran and the International Atomic Energy Organization Failing to reach even a modest agreement on monitoring Tehran’s nuclear facilities this week bodes ill for the talks, said Eurasia analyst Henry Rome.