On Monday, both UK and US West Texas Intermediate (WTI) crude oil futures’ prices had rounded off the session 3 per cent lower, pulling back from a 9-month peak reached on Friday, as a rapidly-spreading new strain of pandemic contagion was sending shockwaves on the day’s global equity and commodity markets, reviving frets of a potential demand concern.
In point of fact, crude oil futures opened the market in a mixed tenure in the Asia-Pacific trading hour, but had faltered as much as 5 per cent following reveal of a media report that the UK Government had been shutting down much of the country’s counties following reveal of a new strain of pandemic contagion, while a basket of British medias had been quoted UK health officials as saying that the new prototype could be 70 per cent more infectious than the strains causing a global-scale pandemic outbreak, prodding a majority of EU and European economies to temporarily cut tie-ups with Britain.
So far, 40 countries had cancelled flights and banned travel to UK. Concomitantly, as the day progresses, signs of infections from the new strain were found in a number of major EU economies including Germany, France and Denmark, stoking worries over a sluggish recovery in crude oil demands.
Aside from that, a marginal revival in safe-haven bid of American currency following release of a media headline that the US Congress had been nearing a vote on a $900 billion pandemic stimulus package, had also weighed on crude oil futures’ prices.
Crude oil stumbles 3% after reveal of new pandemic contagion strain
Citing statistics, although health authorities across the globe including the World Health Organization (WHO) issued separate statements that downplayed the risks of a new strain of pandemic pathogen, Brent crude faltered as much as 2.6 per cent to $50.91 per barrel, while the US WTI crude oil futures’ prices scheduled to be expired on January, plunged 2.8 per cent to $47.74 per barrel.
Both crude oil futures had shrugged off over 5 per cent earlier in the session, marking up their largest intra-session decline in six months. Meanwhile, citing that the road to a higher oil demand and prices would more likely to remain scratchy in an intermediate- to long-term outlook, a UBS oil analyst Giovanni Staunovo said late in the day, “Reports of a new strain of the coronavirus have weighed on risk sentiment and oil.
New mobility restrictions across Europe are also not helping as European oil demand will suffer. Investors need to be mindful that the road to higher oil demand and prices will remain bumpy. ”