Oil declines amid spread of new COVID-19 strain

Oil prices continued their downward momentum on Tuesday, with investors monitoring the updates on the spread of a new strain of the novel coronavirus in the United Kingdom.

A number of European and Asian countries suspended air travel with the UK until the nature of the new strain becomes clear.

Crude prices settled lower by more than 2.5% on Monday.

Stephen Innes, chief market strategist at Axi, said the oil market had been overbought, so the selloff was inevitable, Reuters reported.

“The downside risks are greater than the upside until we better understand how politicians are going to react in 2021 – whether they’re going to lock things down again,” Innes said.

In terms of trading, Brent crude was down 1.7% at $50.05 per barrel, at 9 am Makkah time.

The US West Texas Intermediate fell 2.8% to $47.74 a barrel.