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Oil Tumbles On Virus Variant Fears

Oil prices plunged on Friday amid fresh demand fears and concerns about oversupply.

Benchmark Brent crude futures fell $4.60, or 5.6 percent, to $77.62 a barrel in European trade.

U.S. West Texas Intermediate (WTI) crude futures were down $5.28, or 6.7 percent, at $73.11 a barrel, after hitting a two-month low during the session.

There was no settlement for WTI on Thursday because of the Thanksgiving holiday.

A new Covid-19 strain discovered in South Africa has raised concerns about the outlook for economic growth and fuel demand.

The EU and UK moved to impose travel restrictions on a group of southern African nations after the discovery of a new coronavirus that scientists say is a concern because of its high number of mutations.

Little is known of the variant detected in South Africa, Botswana and Hong Kong, but scientists said it may be able to evade immune responses or make it more transmissible.

The World Health Organization will hold a "special meeting" today to discuss if the heavily mutated strain will become a variant of interest or a variant of concern.

Investors were also watching China's response to the U.S. release of millions of barrels of oil from strategic reserves aimed at easing tightness in supply.

OPEC's advisory body, the Economic Commission Board, expects a surplus of 400,000 barrels per day (bpd) in December, rising to 2.3 million bpd in January and 3.7 million bpd in February if consumer nations went ahead with the release.

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