ConocoPhillips’s implied volatility
As of June 22, ConocoPhillips (COP) had an implied volatility of ~26.6%, which is marginally higher than its implied volatility of ~26.5% on March 30. Last week, COP’s implied volatility increased from ~24.8% to ~26.6% due to a strong ~4% up-move in its stock price.
COP’s price range forecast
Based on ConocoPhillips’s implied volatility of ~26.6%—and assuming the normal distribution of prices, 365 days in a year, and a standard deviation of one—its stock could close between $70.27 and $65.29 by June 29. COP’s stock should stay in this range 68% of the time. On June 22, COP’s stock price closed at $67.78.
Peer price range forecasts
As of June 22, COP’s peer Marathon Oil (MRO) had an implied volatility of ~38.34%, which means MRO stock is expected to close between $22.61 and $20.35 by June 29. On June 22, MRO’s stock price closed at $21.48. Just like COP, MRO has operations at international locations as well as in the United States. However, both COP and MRO are focusing more on the unconventional resources in the United States.
As of June 22, the SPDR S&P Oil and Gas Exploration & Production ETF (XOP) had implied volatility of ~28.7%, which means XOP is expected to close between $44.28 and $40.90 by June 29. On June 22, XOP’s price closed at $42.59. XOP represents an index of stocks across the energy industry. XOP has ~78% exposure to the oil and gas exploration and production industry.
On June 22, COP’s peers California Resources (CRC) and Southwestern Energy (SWN) had implied volatility of ~80.14% and ~44.82%, respectively. By June 29, these stocks are expected to close in a range of $47.45—$37.97 and $5.81—$5.13 respectively.
Based on the inputs used to calculate the price range, there’s a 68% probability that these stocks will close in their range for the given period.