Crude closed sharply lower on Monday as a new strain of COVID-19 was discovered in the United Kingdom. The new strain is more highly transmissible than current known strains of the virus. In response to the discovery, more than 40 countries have banned arrivals from the UK. The fear of the new strain of the virus is that it will spread to the rest of the world and cause tougher new lockdowns and restrictions. The market continues to feel downward pressure in early trading this morning.
The past few weeks, the market has been riding high on a vaccine-related rally, with each new morsel of news regarding the vaccine sparking gains. On Friday, WTI crude reached nine-month highs as the vaccine rollout continued in the UK and the US. On Monday, the market shed nearly 3% as reality seemed to sink in with the news of the new strain of the virus and vaccine distribution’s slow pace. Traders must face the fact that the end of the pandemic may be further in the future than they had hoped. As the vaccine rollout gives hope for the future, governments must deal with mounting infections in the present.
In early trading today, crude prices are down. Crude is currently trading at $47.38, a loss of 59 cents.
Fuel prices are down this morning. Diesel is trading at $1.4670, a loss of 1.0 cents. Gasoline is trading at $1.3455, a loss of 1.5 cents.