An oil pumpjack stands in the Inglewood Oil Field on 23 November 2021 in Los Angeles, California. President Biden announced a plan to release oil from the Strategic Petroleum Reserve in an effort to curb high gas prices. Photo: Mario Tama / Getty Images /AFP
Oil tanks 10% on demand fears over new Covid variant
“Crude oil prices have slumped sharply over concerns that this new mutation could add to the pressure on demand,” said CMC Markets analyst
An oil pumpjack stands in the Inglewood Oil Field on 23 November 2021 in Los Angeles, California. President Biden announced a plan to release oil from the Strategic Petroleum Reserve in an effort to curb high gas prices. Photo: Mario Tama / Getty Images /AFP
World oil prices slumped more than 10% Friday, slammed by demand fear after the emergence of a new variant of Covid-19.
In late afternoon London trade, New York’s WTI crude tumbled 11.3% to $69.53 per barrel, while European benchmark Brent North Sea oil retreated 10.2% to $73.81.
OIL SLUMP OVER COVID VARIANT
The two contracts briefly sank as low as $68.75 and $73.03 respectively – levels last seen in mid-September.
“Crude oil prices have slumped sharply over concerns that this new mutation could add to the pressure on demand,” said CMC Markets analyst Michael Hewson.
COVID VARIANT ADDS PRESSURE TO GLOBAL ECONOMY
Traders are on edge after the B.1.1.529 variant of Covid-19 was detected in South Africa.
Scientists warn the latest variant could be more infectious than Delta and more resistant to vaccines, potentially dealing a heavy blow to the global economic recovery.
READ: NICD: Vaccines likely to still offer protection against B.1.1.529 variant
‘WILD END TO THE WEEK’
Major US stock indices also dropped at the opening of Friday’s holiday-shortened session as investor alarm spread over the new strain.
“What a wild end to the week,” Oanda analyst Craig Erlam told AFP.
He added: “Oil is among the assets taking a heavy beating on the variant news, falling … as traders fret about the impact on restrictions and behaviour this winter.
“Even without severe restrictions, people will adopt more caution which will weigh on demand.”
© Agence France-Presse
