Oil prices fell on Tuesday while expanding razor-sharp losses instantly, while the spread that is fast of new strain associated with the novel coronavirus in the UK prompted a few nations to shut their boundaries to British travelers and cargo.
U.S. West Texas Intermediate (WTI) crude futures dropped 30 cents, or 0.6%, to $47.67 a barrel at 0156 GMT, while Brent crude futures fell 26 cents, or 0.5%, to $50.65 a barrel.
Both benchmark agreements slid almost 3% on Monday, partly erasing recent strong gains on the straight back associated with the rollout of COVID-19 vaccines, seen as key to flexibility that is reducing.
After great Britain government warned that the variation that is brand new of virus appeared to be spreading even more quickly than previous types, Asia, Pakistan, Russia, Jordan and Hong Kong joined up with European countries in suspending travel from Britain, and Saudi Arabia, Kuwait and Oman closed their borders entirely.
“The nightmare before Christmas time scenario has occur, with a combination of the ‘mutant virus’ compounded by Brexit angst,” stated Stephen Innes, primary market strategist at Axi, talking about doubts over whether British Prime Minister Boris Johnson can secure a post-Brexit trade deal using the European Union.
Innes said the oil market have been overbought, with long roles outweighing positions which are short around 4 to at least one, therefore the selloff had been unavoidable.
Because of the U.S. buck rising as a money that is safe-haven U.S.-dollar priced oil is less attractive for purchasers holding other currencies, which included with force on oil prices.
“the potential risks being downside higher than the upside until we better understand how politicians are likely to react in 2021 – whether they’re likely to lock things down again,” Innes said. Oil prices fell on Tuesday while expanding razor-sharp losses.