Crude oil prices plummeted on Monday despite the good rise during Friday's closing. The reason for the sharp change in mood is the news of the emergence of a new strain of coronavirus, which scientists have identified in the UK. Analysts began to express concerns that this could have a significant impact on the vaccination process and the fight against the COVID-19 pandemic. Moreover, the pressure can lead to another batch of strict quarantine measures that may hinder the beginning of a gradual recovery of the global economy. Therefore, the demand for black gold may suffer even more seriously.
In this regard, the UK's government took an immediate decision to urgently introduce the most stringent restrictive quarantine measures in the capital of the country, as well as almost throughout the south-eastern part of the state. All this is due to the unknown origin of the new strain and its unexplored nature. Thus, since Sunday, Britain again faced another portion of movement restrictions. Moreover, several neighboring states were also seriously alarmed by the ongoing events and decided to suspend transport links with Great Britain. Experts believe that the case will not end there and countries will use even tougher ways to protect themselves from the new strain of coronavirus. Otherwise, the world will be waiting for a more serious lockdown.
However, news of the emergency has not yet fully penetrated the oil market. Investors have just begun to react to the current situation. Thus, it is not surprising that the price of oil of both brands reflected an increase at the end of the previous week. Moreover, the increase occurred for the seventh time in a row, becoming the longest period of continuous recovery in more than a decade. Nevertheless, there is little hope that this week will be as successful.
Recall that the recent news about the progress in the fight against coronavirus infection, particularly the start of the massive vaccinations, greatly supported the black gold. However, the news regarding this matter is not very pleasant at present.
In addition, oil increased its value against the background of the possible early adoption of a new financial incentive program in the United States of America, which also has not yet happened, and the whole process has only been further delayed.
Meanwhile, the news that the US Food and Drug Administration (FDA) has decided to approve another coronavirus vaccine developed by Moderna positively affected the market. Thus, two different drugs have already been approved for use in the country. Their delivery for the start of the mass vaccination campaign has already begun.
The crude oil market has been in a positive state recently. Investors finally stopped restraining themselves and began to work actively, which led to an increase in their investments. All this has made the forecast for next year more positive compared with the previous data. However, the situation with the coronavirus mutation in the UK can radically change everything. Most likely, market participants will again return to a more restrained work, and the former enthusiasm will disappear for some time.
The price of futures contracts for Brent crude oil for delivery in February on the trading floor in London fell immediately by 3% or $1.57, which sent it to $50.69 per barrel. Friday's trading ended with an increase of 1.5% or $0.76 and sent the final price at $52.26 per barrel. This value was the highest in almost a year.
The price of futures contracts for WTI light crude oil for delivery in January on the electronic trading platform in New York sank 2.99% or $1.47. It is currently consolidating around $47.63 per barrel. The contracts will expire by the end of Monday's trading. Friday's session ended with an increase of 1.5% or $0.74, which allowed them to move to the level of $49.1 per barrel. This was also the highest value in almost a year.
