Implied volatility in refining stocks
So far, the implied volatility in refining stocks has put up a mixed trend in the second quarter. The implied volatility in Marathon Petroleum (MPC) has risen by 2.1 percentage points since April 1 to the current level of 31.4%. In contrast, the implied volatility in Marathon Petroleum’s peers has fallen. The implied volatility in Valero Energy (VLO) has fallen the most by 1.5 percentage points to 26.4%.
The implied volatility in Phillips 66 (PSX) and HollyFrontier (HFC) has fallen by 0.7 percentage points and 1.5 percentage points, respectively, since April 1 to 21.7% and 31.5%, respectively. Currently, HollyFrontier stock has the highest implied volatility among its peers.
During the same period, refining stocks have put up a mixed trend. While Valero Energy has risen 0.8%, Marathon Petroleum, Phillips 66, and HollyFrontier have fallen 11.7%, 7.2%, and 9.3%, respectively.
Refining stocks’ forecast
Considering refining stocks’ implied volatilities and assuming a normal distribution of prices or the bell curve model and one standard deviation with a probability of 68.2%, refining stocks could close between their estimated upper and lower price limits in the next 43 calendar days ending on June 28.
HollyFrontier stock could have the highest percentage upside or downside for the 43 days ending June 28. The company could close between $49.5 and $39.9 per share. Phillips 66 stock could have the lowest upside or downside. Phillips 66 could close between $94.9 and $81.7 per share. Valero Energy stock could close between $93.2 per share and $77.7 per share. Marathon Petroleum stock could close between $58.6 per share and $47.2 per share.