Oil tanks 10% on demand fears over new Covid variant

London, Nov 26 (AFP/APP):World oil prices slumped more than 10 percent 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 percent to $69.53 per barrel, while European benchmark Brent North Sea oil retreated 10.2 percent to $73.81.

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.

Traders are on edge after the B.1.1.529 variant of Covid-19 was detected in southern 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.

Major US stock indices also dropped at the open 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.”