By Kaveesha Fernando
LONDON, UK (CWBN)_ A prominent international news agency reports that oil prices dropped by almost 2% on Tuesday, dipping below $50 per barrel amid fears regarding the new COVID-19 strain in the UK. Many Western nations (including most of Europe) closed off airports to passengers arriving from the UK, with France even temporarily halting the passage of cargo. Several countries in the rest of the world have also imposed tight restrictions on travellers from the UK at least temporarily.
Fears that the newly discovered vaccine, which was seen by many as means to return to “normal”, would not be effective against the new strain of COVID-19 have also caused prices to plummet. News of the new strain have also led to increased lockdowns and other preventive measures globally, which have further compounded the problem by leading to increased fears of reduced travel.
Prices nosedived this year amidst fears that the pandemic would halt travel (especially air travel), thus driving down the demand for fuel. Saudi Arabia and Russia led a “race to the bottom” as both countries increased production owing to a price war, causing prices to sink.
Although prices did initially pick up after governments lifted strict lockdowns in many places, and Sausi Arabia and Russia agreed on production guidelines, this slight increase in price did not prevent large scale economic fallout in the US oil industry. The American Petroleum Institute’s oil inventory report, due in a few hours, is expected to show that stocks have plummeted by over 3 million barrels.
