Oil falls as new coronavirus strain raise worries over demand recovery

Oil prices fell for a second day on Tuesday as a new strain of the coronavirus in Britain raised worries about fuel demand recovery.

The fast spread of the new coronavirus strain has shut down most of Britain, and prompted neighboring countries to shut down their borders to British travellers and cargo.

Brent crude futures fell 1.1%, or 54 cents, at $50.37 per barrel. U.S. West Texas Intermediate crude futures dropped 1.2%, or 59 cents, at $47.38 per barrel. 

Both contracts fell almost 3% on Monday, erasing strong gains over the rollout of COVID-19 vaccines. The British government announced that a new strain of the virus was spreading faster than the others. This prompted European countries to suspend travel from Britain. 

Russia, India, Hong Kong, Jordan, and Pakistan also banned travel from the UK, while Oman, Saudi Arabia, and Kuwait shut down their borders completely. 

Traders are awaiting U.S. crude stockpile reports due later in the week to assess the near-term market.