Oil drops driven by fears of reduced demand amid tighter restrictions to curb the new strain of SARS-Cov-2

Shafaq News/ Oil prices fell on Tuesday, extending sharp losses overnight, as the rapid spread of a new strain of the novel coronavirus (SARS-Cov-2) in the United Kingdom prompted several countries to close their borders to British travelers and freight.

U.S. West Texas Intermediate (WTI) crude futures dropped 35 cents, or 0.73%, to $47.62 a barrel at 05:15 GMT, while Brent crude futures fell 31 cents, or 0.61%, to $50.59 a barrel.

Both benchmark contracts slid nearly 3% on Monday, partly erasing recent strong gains on the back of the rollout of COVID-19 vaccines, seen as key to easing mobility restrictions.

After the U.K. government warned that a new variant of the virus seemed to be spreading much faster than previous kinds, India, Pakistan, Russia, Jordan, and Hong Kong joined European countries in suspending travel from Britain, and Saudi Arabia, Kuwait, and Oman closed their borders completely.

With the U.S. dollar rising as a safe-haven currency, U.S.-dollar priced oil is less attractive for buyers holding other currencies, which added to pressure on oil prices.