U.S. West Texas Intermediate crude oil futures plunged on Friday as the discovery of a new and possibly vaccine-resistant coronavirus variant spooked investors, raising concerns over potential demand destruction and adding to worries that a supply surplus could swell in the first quarter.
The U.S. benchmark fell along with equities and other commodities on fears the variant could dampen economic growth and fuel demand. Britain and the European states have restricted travel from southern Africa, where the variant was detected.
Earlier in the week, prices see-sawed, first pressured by worries about the release of oil from government reserves then supported as this move proved to be much smaller than anticipated. Furthermore, investors are awaiting a response from OPEC+ when it meets to discuss its production deal on December 2.
US and Allies Challenge OPEC+ with Release of Oil Reserves
The administration of U.S. President Joe Biden announced on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan, and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude.
Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of U.S. demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately…