UPDATE 10-Oil tumbles as new virus strain revives demand fears

* Biggest daily fall since June during the session
* New virus strain shuts much of UK, overshadows U.S.
stimulus
* Countries impose travel curbs on UK routes

(Updates to settlement)
By Devika Krishna Kumar
NEW YORK, Dec 21 (Reuters) - Oil prices tumbled nearly 3% on
Monday as a fast-spreading new coronavirus strain that has shut
down much of Britain and led to tighter restrictions in Europe
sparked worries about a slower recovery in fuel demand.
Brent crude LCOc1 settled down $1.35, or 2.6%, at $50.91 a
barrel, while U.S. West Texas Intermediate (WTI) crude for
delivery in January CLc1 ended the session $1.36, or 2.8%,
lower at $47.74 ahead of expiry.
The more active February WTI contract CLc2 fell $1.27, or
2.6%, to settle at $47.97 a barrel.
Both contracts had lost as much as $3 earlier in the
session, their biggest daily drop in six months.
The strength in the U.S. dollar .DXY also weighed on oil
markets. A strong greenback makes dollar-denominated commodities
like crude oil more expensive to holders of other currencies.
"Reports of a new strain of the coronavirus have weighed on
risk sentiment and oil. New mobility restrictions across Europe
are also not helping as European oil demand will suffer," said
UBS oil analyst Giovanni Staunovo.
"Investors need to be mindful that the road to higher oil
demand and prices will remain bumpy."
Brent climbed above $50 last week for the first time since
March, buoyed by optimism stemming from COVID-19 vaccines.
But a new COVID-19 strain, said to be up to 70% more
transmissible than the original, has renewed fears about the
virus, which has killed about 1.7 million people worldwide.
More countries closed their borders to Britain on Monday,
causing travel chaos and raising the prospect of UK food
shortages. "The new strain of the coronavirus in the UK has shown us
that the vaccine optimism holding Brent above $50 per barrel
could be deflated in a fleeting moment," said Rystad Energy
analyst Louise Dickson.
The new virus strain has already been detected in other
countries, including Australia, the Netherlands and Italy.
Russian Deputy Prime Minister Alexander Novak said the new
strain had an impact on oil prices, adding that recovery of
global oil markets was happening more slowly than previously
expected and could take two to three years. "Travel restrictions over the next several weeks will
complicate OPEC+ plans to gradually raise output," said Edward
Moya, senior market analyst at OANDA in New York.
"The monthly meetings will be very tense and keep oil prices
volatile until the virus spread is under control across both
Europe and the U.S."
The negative sentiment largely overshadowed the rollout of a
new vaccine in the United States, a deal among U.S.
congressional leaders for a $900 billion coronavirus aid package
and European regulatory approval on Monday for the use of the
COVID-19 vaccine jointly developed by U.S. company Pfizer Inc
PFE.N and its German partner, BioNTech 22UAy.DE .
The approval by Europe's medicines regulator puts the region
on course to start inoculations within a week.