Global crude oil prices recorded their steepest daily decline since July on Friday as reports of the new heavily-mutated coronavirus strain raised concerns of fresh travel restrictions that could cripple fuel demand. At 1245 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $4.82 (-5.86 percent) to reach $77.40 a barrel. Similarly, the US West Texas Intermediate (WTI) price reached $73.50 a barrel, down by $4.89 (-6.24 percent).
The price for Opec Basket was recorded at $81.75 a barrel with an increase of 3.61 percent, Arab Light was available at $80.38 with 2.66 percent decrease, and the price of Russian Sokol slipped to $81.28 with a decrease of 2.10 percent. According to experts, oil slid in tandem with financial markets on fears that the new variant, which was first detected in southern Africa, could slow economic growth if new restrictions are imposed. They said that depending on how this virus-led selloff evolves, and how concerned the WHO is of it, the calculations surrounding the Organisation of Petroleum Exporting Countries and its allies (OPEC+) meeting next week could change. They further said that OPEC+ has stated repeatedly that one area of caution is the resurgence of Covid-19.
It remains to be seen what the OPEC+ will decide next week to scrap output increases after a coordinated release of strategic reserves by several countries, including the United States. The group plans to discuss whether to adjust its plan to increase output by 400,000 bpd in January and beyond. The US said on Tuesday it would release 50 million barrels of oil from its strategic reserves to curb rising gasoline prices, in a coordinated move with a number of other major oil consumers, including Japan, the UK, India, China, and South Korea. All of them, except for China, also announced the release of reserves at varying volumes.
