Oil’s Rally Slows Down as Concerns of the New Covid-19 Variant Plunges Travel Demand

Oil’s Rally Slows Down as Concerns of the New Covid Variant Plunge Travel Demand

 

Oil prices dropped more than 1% on Tuesday, erasing earlier gains on the optimism of coronavirus vaccines as the new variant of coronavirus emerged in the U.K. which is more contagious than the current one.

 

West Texas Intermediate (WTI) crude dropped 1.75% to $47.13/bbl while the international benchmark Brent crude decreased 1.55% to $50.12/bbl. Both benchmarks also recorded a decline in Monday trading, falling nearly 3%.

 

During the weekend, UK Prime Minister Boris Johnson announced a new tier 4 restrictions for London and Southern England as the new variant coronavirus that is 70% more transmissible has spread quickly and is “out of control”. Household mixing is prohibited and non-essential shops have to close, with a stay at home measure introduced, while many European nations impose travel bans on the UK.

However, many experts, including the World Health Organization (WHO) believed that existing vaccines will be able to fight the new Coronavirus variants as the strain contains genes similar to the original Covid-19.