Oil prices reportedly fell in early trading on Monday. This is because the new coronavirus that is spreading rapidly in the UK raises concerns about tighter lockdowns there and in other European countries. It triggers new changes and movements lately.
Many parties worry that such restrictions could hamper the global economic recovery and its need for fuel. According to data on the market Brent crude fell as much as 97 cents or 1.9%. It means the price to $51.29 per barrel at the present time.
The figure was recorded after the commodity rose 1.5% and touched its highest level since March last Friday. In addition to Brent, several other 'brands' have also reported declines in the market due to concerns about the pandemic of coronavirus.
Data Decline in the Market
It could be seen that the U.S. West Texas Intermediate (WTI) crude slumped for 83 cents or 1.7%. That means the price they reached to $48.27 a barrel after earlier also rising 1.5% on Friday to its highest level since February this year.
Monday's drop was a moment after commodity prices marked seven consecutive weeks of gains last week. The increase may occur as investors focus on launching a COVID-19 vaccine that is reportedly effective and safe. Those are from Pfizer, Moderna, and many more again.
The existence of new coronaviruses in the UK and tighter travel restrictions in Europe are triggering concerns over a slower economic recovery. It was not expected by many people. That condition prompted many investors in the market to relinquish their buying positions.
A commodities brokerage Fujitomi Co’s chief analyst, Kazuhiko Saito said that the oil market has been on a bullish trend in the past month. Such commodities ignore negative factors. Before, that was affected by the expectation about vaccines.
Such Expectations Disappear suddenly
Earlier, oil was at the center of optimism that the broader launch of the vaccine would revive global growth. However, investors' bright expectations for 2021 seemed to suddenly disappear so that market conditions began to change some days ago.
British Prime Minister Boris Johnson is reported to be chairing an emergency response meeting on Monday. The meeting was deliberately scheduled to discuss international travel, particularly the flow of goods in and out of the UK.
The interesting thing is that the moment happened when Johnson also sought to finalize a final deal on Brexit. The increasing numbers of coronavirus cases really bring many bad impacts. Is that those new virus’ variant really dangerous?
According to officials, the latest variant of the virus can be transmitted more than 70% compared to the original and more dangerous. This is the reason why England then locked down again. The move was followed by several other countries in Europe.
The Dollar and Sterling are Also Affected
The US dollar reportedly rose against major currencies on Monday. Investors seem to be choosing to look for safe assets as many countries tighten lockdowns related to the spread of the COVID-19 virus. Elsewhere, Sterling suffered a weakening following news of the UK lockdown.
Meanwhile, the UK said the EU must change its position after Brexit negotiators failed to reach an agreement at the weekend. The moment increases the risk that the country is knocked out of the trading bloc at the turn of the year.
Worse, anything can happen without a deal. Negative sentiment also continued to overshadow the weekend agreement among U.S. congressional leaders. It is known that they are discussing the possibility of a $900 billion coronavirus relief package.
According to the data, the Pound lost as much as 1.1% to $1.3381 after previously trading at $1.3400. Furthermore, the Euro also showed a decline of 0.4%. Today, the currency is $1.22135. The news today is making the market panics.
