By Barani Krishnan
Investing.com - Oil prices resumed their slide on Monday on worries about how a new variant of the Covid-19 would impact people and businesses across the world and, ultimately, their demand for energy.
After an unbroken rally of seven weeks, crude prices are on the backfoot now, after the discovery of the VUI-202012/01 variant of the coronavirus in Britain. Some 40 countries have since barred entry to U.K. travelers to prevent the spread of the new variant which U.K. health authorities said was 70% more transmissible than the Covid-19.
The U.S. Centers for Disease Control and Prevention also warned last week that the VUI-202012/01 was probably already circulating undetected in America.
New York-traded WTI, the key indicator for U.S. crude, settled Monday’s trade down 61 cents, or 1.3%, at $47.62 per barrel. It fell 2% last week, after rallying a total of 36% in seven weeks prior.
London-traded Brent, the global benchmark for crude, was down 43 cents, or 0.8%, to $50.91 by 3:07 PM ET (20:07 GMT). Brent lost 1.9% last week, after rising 40% in seven weeks before that.
The rally in oil was snuffed by worries that the VUI-202012/01 variant could force new business lockdowns and restrictions on people even as Covid-19 vaccines from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) brought the promise of curbing the pandemic.
Aside from doubts about crude demand going forward, major producer Russia is also pressing its allies in the Organization of the Petroleum Exporting Countries to raise production by 500,000 barrels per day from next month, just after the OPEC group agreed on a similar quantum for January.
“Lockdown efforts have mostly been intensified but that is not preventing the Russians from pushing for output hikes in February,” observed Ed Moya, analyst at New York’s OANDA.