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US Brent, WTI crude top for 5th week of losses as oil prices plunge with new COVID variant


Brent crude tops for 5th week of losses as oil prices plunge with new COVID variant

OPEC+ is monitoring developments around the new coronavirus variant

Oil prices fell about $10 a barrel on Friday, the biggest one-day drop since April 2020, as the new COVID-19 variant spooked investors and added to fears that an oversupply could lead to a potential spike in oil prices. may increase in the first quarter.

Oil fell with global equity markets on concerns the variant could dampen economic growth and fuel demand.

The UK and European countries have restricted travel from southern Africa, where the variant was discovered, as researchers sought to find out if the mutation was resistant to vaccines.

According to South Africa’s health minister, the World Health Organization has designated the new variant as “disturbing”.

Brent crude fell $9.21, or 11.2%, to $73.02 a barrel. U.S. West Texas Intermediate (WTI) crude fell $10.10, or 12.9%, at $68.29 a barrel, following Thursday’s Thanksgiving holiday in the United States.

Both contracts are heading for their fifth losing week and their steepest drop in absolute value since April 2020, when WTI first turned negative.

Variations in South Africa have emerged during the US Thanksgiving Holiday, triggering auctions in a market that previously occurred between producer and consumer nations.

Traders are eyeing to see if US crude settles below $70 on Friday, which is a technical support for the market. “The obvious response to a worrisome new variation is to stifle international travel,” said John Kilduff, Partner at Again Capital LLC in New York.

OPEC+ is monitoring developments around the novel coronavirus variant, sources said on Friday, with some expressing concern that it could worsen the oil market outlook less than a week before the crisis. policy meeting.

Prices rose at the start of the week as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) suggested they could reduce output in response to a strategic release from major consuming countries that are members of the group. International Energy Agency.

Such a rollout is likely to increase supply in the coming months, an OPEC source said, based on the findings of a study by a panel of experts advising OPEC ministers.

The forecasts dim the outlook for the December 2 meeting when the group will discuss whether to revise its plans to increase production by 400,000 bpd in January and beyond.

“Opec’s initial assessment of coordinated (stockpile) releases and the sudden emergence of a new variant of the coronavirus raise serious concerns about a rise in growth,” said PVM analyst Tamas Varga. economic growth and oil balance in the coming months”.

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