Oil prices plunge 12%.. the worst daily decline in 2021

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Oil prices tumbled more than 10% on Friday, recording the largest one-day decline since April 2020, after the discovery of a new strain of the Corona virus worried investors and boosted fears of a global oversupply inflation in the first quarter of next year.

Oil fell along with global stock markets on fears that the new strain, which Britain said was the most important strain discovered so far of the Corona virus, could impose travel restrictions and undermine economic growth and fuel demand.

Britain and other European countries imposed travel restrictions on South African countries where the new strain was detected.

By 14:59 GMT, Brent crude fell $8.77, or 10.7 percent, to $73.45 a barrel.

West Texas Intermediate crude fell $9.12, or 11.6%, to $69.27 a barrel after the Thanksgiving holiday in the United States on Thursday.

The two benchmarks are set to record losses for the fifth consecutive week, and the largest declines ever since April 2020.

And authorities around the world moved with great concern Friday after news of the discovery of the new strain in South Africa, and the European Union and Britain were among the regions that tightened travel procedures, while researchers sought to find out whether mutations of the new strain were resistant to vaccines.

Investors are also awaiting China’s reaction to the announcement by the administration of US President Joe Biden on Tuesday that Plans to release millions of barrels of oil of strategic reserves in coordination with other major consumers in an effort to cool prices.

A source in the Organization of the Petroleum Exporting Countries (OPEC) said that such a move would likely result in an increase in supplies in the coming months, according to the findings of a panel of experts advising OPEC ministers.

The source said that the Council of the OPEC Economic Committee expects a surplus of 400,000 barrels per day in December, increasing to 2.3 million barrels per day in January and 3.7 million in February if consuming countries go ahead with withdrawals.

Expectations of an increase in oil supply hang over the prospects of a meeting of OPEC +, the grouping of OPEC and its allies, on the second of December to decide on immediate production. The group will decide whether to continue to increase production by 400,000 barrels per day in January.





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