Oil fell sharply as a new Covid-19 strain raised concerns about the demand outlook, buoying global markets.
Futures in New York fell below $74 a barrel and the benchmark Brent fell more than 5%. The emergence of the new tension has seen many countries impose curbs on travel from South Africa and some neighboring countries. There was a huge sell-off in global markets as traders fled to shelter in the asset.
Keshav Lohia, founder of analytics company Oilytics, said, “With so little information about it, the market is right to panic. It is however a cat-and-mouse game between vaccines and variants.”
The fall comes ahead of a major meeting of OPEC+ to decide production policy for January. Earlier this week, the US and other countries are using strategic reserves to combat rising energy prices. While representatives of the cartel indicated that supplies may have to be halted, Citigroup Inc. said that lowering the quota would destroy the group’s claim to provide the public good by stabilizing the market.
Questions have been raised in recent days about China’s position on the reserve release after it was named as one of the participants in the US-led effort, but government officials said the nation remained committed to the move. He said Beijing just wanted to make sure it was seen as independent and didn’t misunderstand public cooperation as taking orders from Washington.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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