Oil Slides below $50 as the New Coronavirus Variant in UK Weighs on Demand

Oil prices dropped below $50 on Wednesday’s trading session as concerns of the new variant of the coronavirus in the UK weighed on the demand amid travel ban from other European countries.

 

In an early Asia trading session on Wednesday, WTI fell 2.44% to $46.80/bbl, while Brent crude dropped 2.16% to $49.81/bbl.

 

Both benchmarks started the retreat on Monday after the 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, adding that it was “out of control”.

France, Germany, Italy, the Netherlands, Belgium, Austria, Ireland, Bulgaria and countries in the American continent such as Canada, Chile, Colombia and Argentina have announced restrictions on UK travel on Monday.

Nevertheless, France will reopen its borders to passengers from England, starting Wednesday to allow French and other EU residents to return home if they have a negative Covid-19 test that is less than 72 hours old.

The deal between France and England also helped a long queue of trucks being held at the border to be able to deliver their products as stores are emptied before Christmas.

 

In addition, 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.

BioNTech’s CEO is also confident that coronavirus vaccines produced by the company will work against the new variant in U.K. Still, the company cited that further studies are required to be completely certain.