Oil prices slid in early trade on Monday as a fast-spreading new coronavirus strain in the United Kingdom raised concerns that tighter restrictions there and in other European countries could stall a recovery in the global economy and its need for fuel.
Brent crude dropped 97 cents, or 1.9%, to $51.29 a barrel by 0103 GMT after rising 1.5% and touching its highest since March last Friday.
U.S. West Texas Intermediate (WTI) crude was down 83 cents, or 1.7%, to $48.27 a barrel after also climbing 1.5% on Friday to its highest level since February.
Monday’s declines came after oil prices marked seven straight weeks of gains last week as investors focused on the rollout of Covid-19 vaccines.
“A new variant of the coronavirus in Britain and tighter travel restrictions in Europe sparked fears over slower economic recovery, prompting investors to unwind long positions,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.
“The oil market has been on a bull trend in the past month or so, ignoring negative factors, amid an optimism that a widening vaccine rollout would revive global growth, but investors’ rosy expectations for 2021 have suddenly vanished,” Saito said.