Oil prices are now falling freely, down 10% from Thursday’s close due to risk to demand from a new variant of the coronavirus found in South Africa.
At about 4:00 pm (Lisbon time), the price of a barrel of Texas WTI crude for January delivery fell 11.30% to $ 69.53.
A barrel of Brent from the North Sea (benchmark for Europe) fell 10.23% to $ 73.81.
This decline means that in one session, the gains of the past two months have been eliminated, and WTI and Brent were trading at the same prices as in mid-September.
“Oil is waking up with concerns about a new option,” said Craig Earlam, an Oanda analyst quoted by AFP.
A new variant of the coronavirus, designated B.1.1.529, was first discovered in South Africa and could spread rapidly, according to scientists, unsure at this stage if the vaccines currently available are effective. against her.
Some European countries have already decided to suspend flights from southern Africa, while others, such as Japan, have decided to introduce quarantines.
“The fear that others will impose new containment measures and travel restrictions further aggravates the oil situation,” says Thinkmarkets’ Fawad Razakzada.
Investors are worried about the “impact of these travel restrictions,” real or potential, Erlam said.
“Even without hard restrictions, people will be more careful, which will depend on demand,” he added.
The focus is on the Organization of the Petroleum Exporting Countries (OPEC) and its 10 OPEC + allies, which are meeting next Thursday to determine the evolution of the joint proposal from early next year.
In addition to the risk associated with this new option, it was announced this week that the US and other countries will use their strategic reserves to boost supply and lower oil prices.
Oil prices, which fell below $ 20 in the midst of the pandemic, have rebounded in recent months, reaching high levels at the end of 2018.
