Oil’s implied volatility
On April 25, US crude oil’s implied volatility was 22%, which is 2.7% below its 15-day average. Usually, lower implied volatility supports oil prices. The following chart shows the inverse relationship between oil prices and oil’s implied volatility. Since reaching a 12-year low in February 2016, US crude oil active futures have risen ~148.8%. Crude oil’s implied volatility has fallen ~70.7% since February 11, 2016.
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On April 26–May 3, US crude oil futures should close between $63.53 and $66.89 per barrel 68.0% of the time. The forecast is based on crude oil’s implied volatility of 22% and assumes a normal distribution of prices. On April 25, US crude oil June futures fell 1% and settled at $65.21 per barrel.