Oil Extends Losses On Demand Recovery Concerns

Oil prices fell on Tuesday to extend losses from the previous session as a fast-spreading new coronavirus strain prompted several countries to close their borders to Britain, fueling worries about a slower recovery in fuel demand.

Benchmark Brent crude dropped 73 cents, or 1.4 percent, to $50.18 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 72 cents, or 1.5 percent, at $47.25.

More than 40 countries have banned U.K. arrivals amid fears over the coronavirus mutation that was first identified in Britain.

The new virus strain has also been detected in other countries, including Australia, the Netherlands and Italy.

German pharmaceutical company BioNTech said it was “highly likely” that its vaccine against the coronavirus works against the new virus variant detected in Britain.

“Scientifically, it is highly likely that the immune response by this vaccine also can deal with the new virus variant,” said Ugur Sahin, the co-founder of the company.

If needed, “in principle the beauty of the messenger technology is that we can directly start to engineer a vaccine which completely mimics this new mutation — we could be able to provide a new vaccine technically within six weeks.”

Meanwhile, a British minister said the U.K. and France are working to find a way to lift border closures that have snarled one of Europe’s most important trade routes.

Russian Deputy Prime Minister Alexander Novak said the situation has changed in the past two days and the oil market is unpredictable now.

Novak also warned U.S. president elect Joe Biden not to derail the Organization of the Petroleum Exporting Countries (OPEC) and allies’ attempt to reduce output and bolster the global oil market.

The negative sentiment overshadowed the approval of a $900 billion coronavirus aid package in the United States and European regulatory approval for the coronavirus vaccine developed by BioNTech and Pfizer.

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