Oil prices plunged more than 10 per cent on Friday as reports of a virulent new coronavirus variant sparked fears of more pandemic lockdowns and another blow to fuel demand, just as the US plans to release more supplies on to the market.

West Texas Intermediate, the American oil benchmark, dropped by 13 per cent to settle at $68.15 a barrel as US traders returned following the Thanksgiving holiday. The international benchmark Brent fell 12 per cent to settle at $72.72 a barrel.

Both of the oil markers had their biggest one-day declines since the WTI price briefly went negative in April 2020 at the height of the pandemic.

The falls in price came days after the White House, concerned about soaring petrol costs and widespread inflation, announced that it would release 50m barrels of crude from its Strategic Petroleum Reserve over the coming months — the biggest-ever drawdown of oil from the government stockpile — in conjunction with added contributions from five other countries.

The US announcement on Tuesday had little immediate effect on prices. But news of the B.1.1.529 Sars-Cov-2 variant, first identified in Botswana, has now overwhelmed sentiment.

Read more…