By Barani Krishnan
Investing.com - Oil prices tumbled on Tuesday for a second straight day, responding to concerns about a mutating new strain of the coronavirus spreading across the United Kingdom and likely to have landed in the United States as well.
New York-traded WTI, the key indicator for U.S. crude, settled Tuesday’s trade down 72 cents, or 1.5%, to settle at $47.02 per barrel. On Monday, WTI lost 2.8%.
London-traded Brent, the global benchmark for crude, slipped 83 cents, or 1.6%, to close at $50.08. Brent even fell to $49.55 during the session, briefly sliding below key $50 support, the second time it has done so after a slide to $49.20 in the previous session. On Monday, Brent lost 2.5%.
“Oil prices are slipping into the holiday as a new strain of Covid 19 is overshadowing a relief package that Congress finally passed,” Phil Flynn, analyst at Chicago’s Price Futures Group said, referring to the $900 billion fiscal relief approved for the pandemic.
Until this week’s retreat, oil prices had been on a tear for almost two months on bets that people across the world might soon be able to travel freely as millions of doses of coronavirus vaccines were being prepared for delivery over the course of the next few weeks, after approval by relevant health authorities.
The rally was stopped in its tracks by news on Monday that countries across Europe and beyond had barred U.K. travelers amid reports the new Covid-19 strain was spreading 70% faster than earlier variants and was responsible for a surge in cases in London and its surrounding areas.
The U.S. Centers for Disease Control and Prevention warned on Tuesday that the new variant of the virus may already in America, undetected.
Oil prices were also pressured on Tuesday by reports that major producer Russia was planning to hike output in response to higher demand from Asian customers.