Implied volatilities in integrated energy stocks

Implied volatilities in integrated energy stocks have seen mixed trends in the second quarter. While implied volatility in ExxonMobil (XOM) has risen, it has declined in BP (BP), Chevron (CVX), and Royal Dutch Shell (RDS.A).

What’s the Price Forecast for XOM, CVX, RDS.A, and BP?

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Implied volatility in ExxonMobil has risen by 0.4 percentage points over April 1 to the current level of 16.9%. However, implied volatilities in Chevron, Shell, and BP have fallen by 0.5 percentage points, 1.7 percentage points, and 0.4 percentage points, respectively, in the same period. Implied volatilities in Chevron, Shell, and BP currently stand at 18.1%, 14.2%, and 17.1%, respectively. Furthermore, considering the absolute implied volatility levels, Chevron’s level is higher than Shell, ExxonMobil, and BP. Shell stock has risen by 1.5%. However, ExxonMobil, BP, and Chevron have fallen 5.2%, 5.1%, and 1.0%, respectively, since April 1.

Integrated energy stocks forecast for the second quarter

Given the integrated stocks’ current implied volatilities and assuming a normal distribution of prices, which is a bell curve model, and one standard deviation with a probability of 68.2%, these stocks could close within their upper price limit and lower price limit in the second quarter ending on June 28, 2019.

If we refer to the above chart, we can infer that Chevron stock, which has the largest implied volatility, could have the most significant percentage gain or loss by the end of the second quarter. Chevron could close between $129.8 and $114.2 per share. In contrast, Shell could have the smallest gain or loss. Shell could close between $66.8 and $60.3 per share. BP could close between $44.0 per share and $39.0 per share, and ExxonMobil could close between $81.2 per share and $72.0 per share.

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