US oil fell 6.8% to about $ 73 a barrel. Brent crude, the world’s benchmark for oil, fell 6% to around $ 77.
South Africa’s Minister of Health said on Thursday that a new variant of the coronavirus appeared to be spreading rapidly in parts of the country. It has also been detected in Botswana, Hong Kong and Israel.
Investors have been “scared” by the discovery of the new variant of Covid-19, Jeffrey Halley, senior market analyst for Asia-Pacific in Oanda, said on Friday in a research note.
Economists were already nervously watching a spike in Covid-19 infections in Europe. Some countries have introduced new restrictions to contain the spread, raising fears of a reduction in activity this winter at a time when inflation and supply chain problems are already clouding growth prospects.
Germany reported 76,414 cases on Friday, a new single-day high. The country’s acting Health Minister Jens Spahn told reporters the situation with Covid-19 in Europe’s largest economy was “more serious than at any time in the pandemic so far” and he warned against “drastic measures in the weeks to come” so decisive no action is currently taken to reduce contact between people.
“Beyond the current wave of infections in central Europe, a new variant of the (…) virus that is spreading rapidly in South Africa is causing serious concern”, commented on Friday economists of the Berenberg bank in a note.
“If Germany were to impose a national lockdown, we would probably have to revise our forecasts for German and euro area GDP for the fourth quarter downwards,” they added.
Travel and airline shares were among the biggest declines on Friday.
“With the delta wave in mind at the start of this year, investors are likely to shoot first and ask questions later until more is known,” said Halley.
– Rob North and Nadine Schmidt contributed to this article.