Picture used for illustrative purpose. File

Gulf Today Report

Oil prices declined by 3%  on Monday as new coronavirus strain spreads, leading to tighter restrictions in the United Kingdom and increasing worries over low fuel demand.

Brent crude slid $1.54, or 3.0%, to $50.72 a barrel by 05:10 GMT after rising 1.5% reaching its highest since March.

US West Texas Intermediate (WTI) crude was down $1.42, or 2.9%, to $47.68 a barrel after also climbing 1.5% on Friday to its highest level since February. 

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 Restrictions imposed in Europe to fight new coronavirus strain and Brexit talks has affected the market, said Chiyoki Chen, chief analyst at Sunward Trading.

Progress in vaccine has given money managers the avenue to increase their net long US crude futures and options positions.

"The oil market has been on a bull trend in the past month or so, ignoring negative factors, amid an optimism that a widening vaccine rollout would revive global growth, but investors' rosy expectations for 2021 have suddenly vanished due to a new variant of the virus," said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.

 On Saturday, Russian Deputy Prime Minister said global oil demand remains between 6 and 7 million barrels per day under pre-crisis levels.