Oil prices down over pandemic-driven demand fears

Oil prices fell on Wednesday with the new strain of COVID virus in the UK casting doubts over prompt oil demand recovery, while an estimated rise in US crude stocks also fuels these doubts.

International benchmark Brent crude was trading at $49.34 per barrel at 0620 GMT with a 1.48% decrease after closing Tuesday at $50.08 a barrel.

American benchmark West Texas Intermediate (WTI) was at $46.33 per barrel at the same time for a 1.47% decrease after ending the previous session at $47.02 a barrel.

Oil prices continued their downward trend despite the optimism over the approval of the long-awaited US stimulus package on Monday, which had hoped to relieve the strained economy and restore oil demand.

However, President Donald Trump asked for revisions to be made to the $892 billion coronavirus relief bill before he is prepared to sign it, describing parts of it as "wasteful spending".

The uncertainty caused by the emergence of the new strain of coronavirus in England, which is said to spread faster than the original virus, was the main reason for the decline in oil prices.

While many countries decided to stop flights with the UK due to the mutant virus, three airlines in the US have agreed to require a negative coronavirus test result from passengers boarding flights from the UK to New York.

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a rise of 2.7 million barrels in US crude oil inventories relative to the market expectation of a 3.2 million-barrel fall.

If crude stocks increase in line with the API's expectations, it signals that crude demand is falling in the US, the world's largest oil consumer, to negatively affect oil prices.