Oil’s implied volatility
On March 28, US crude oil’s implied volatility was 25.8%—on par with its 15-day average. Usually, lower implied volatility supports oil prices. You can see the inverse relationship between oil prices and oil’s implied volatility in the following chart. Since reaching a 12-year low in February 2016, US crude oil active futures have risen ~126.2%. Crude oil’s implied volatility has fallen ~65.7% since February 11, 2016.
On March 29–April 5, US crude oil futures should close between $57.70 and $60.90 per barrel 68.0% of the time. The forecast is based on crude oil’s implied volatility of 25.8% and assumes a normal distribution of prices. On March 28, US crude oil May futures fell 0.2% and settled at $59.3 per barrel.