Oil plummets due to new variant of Covid-19; widens losses to 11.30%

Oil prices plummeted this Friday, more than 10% compared to the close of the day before, affected the threat that the discovery of a new variant of Covid-19, detected in South Africa, may pose to demand.

Around 16:00 GMT, the price of a barrel of West Texas Intermediate (WTI) for January delivery was down 11.30% and was trading at $ 69.53.

The barrel of Brent of the North Sea for delivery that same month fell 10.23%, to 73.81 dollars.

Both reference contracts on both sides of the Atlantic broke in a session with two months of increases: falling for a period of time to 68.75 dollars and 73.03 dollars, the WTI and Brent are quoted again at September prices.

Oil falls due to concerns about the new variant “of Covid-19, summarized Craig Erlam, an analyst at Oanda.

That new strain, currently called B.1.1.529, was detected in South Africa and has a potential for very rapid spread, according to scientists, who do not know whether currently available vaccines are effective against it.

Several European countries on Friday ordered the suspension of flights originating in southern Africa, and other countries, such as Japan, decreed quarantines for arrivals from that area of ​​the world.

Investors are concerned about “the impact of these restrictions on travel,” already or potential restrictions, Erlam said.

In this context, market actors and observers will further monitor “how it will take into account the OPEC + the risk that the new variant may have on demand, as well as the impact of the release of strategic reserves by the main oil consuming countries, “said Han Tan, from Exinity.

The members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, grouped on the platform OPEC +, will meet next Thursday to discuss the evolution of their joint supply of black gold in early 2022.


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