Oil prices down as mutant virus spurs demand fears

Oil prices were down on Tuesday driven by concerns over a more contagious mutant COVID virus in the UK that overshadowed the good news on the approval of the much-expected US stimulus package.

International benchmark Brent crude was trading at $49.81 per barrel at 0620 GMT with a 2.16% decrease after closing Monday at $50.91 a barrel.

American benchmark West Texas Intermediate (WTI) was at $46.84 per barrel at the same time for a 2.36% decrease after ending the previous session at $47.97 a barrel.

Oil prices declined on concerns of a protracted oil demand recovery due to the emergence of a new strain of COVID-19 in the UK.

Several countries, including India, Pakistan, Russia, Jordan and Hong Kong, as well as European countries, suspended travel from the UK, and even started to close their borders with the country to prevent the spread of the new virus said to be up to 70% more transmissible than the original. Some other countries, like Saudi Arabia, Kuwait and Oman, completely closed their borders.

The mutant virus in the UK even overshadowed the positive US relief package developments for people and hard-hit businesses amid the economic slowdown caused by the pandemic.

The US Senate ended months of anticipation late Monday by overwhelmingly approving a $900 billion coronavirus stimulus bill and sending the measure to President Donald Trump to be signed into law.

The 92-6 vote also approves a wider $1.4 trillion spending bill that will fund the US government through September 2021.

Crude oil prices, which are indexed to the US dollar, also came under pressure with the rising value of the greenback.