Oil Volatility Index News

The sulfur regulation from the International Maritime Organization (IMO) that came into force on 1 January 2020 took the center stage in the shipping industry at outset of the new decade. Four months on, the spotlights have turned to the coronavirus and the OPEC+ oil price war.The outlook for global economic growth remains bleak as the world is faced with the largest recession since the Great Depression in the 1930s.Commodity prices have declined across the board and most recently…

Oil price volatility jumped to its highest level in more than four months on Thursday as U.S. crude plunged 5 percent, after data from the U.S. government showed inventories fell less than expected, disappointing market bulls worried about a glut of crude supply. The CBOE volatility index, a gauge of options premiums based on moves in the U.S. oil exchange traded fund , jumped from 41 to more than 58 - its highest level since March 2. U.S. crude futures closed the session down $2.29, or 4.8 percent, at $45.14 a barrel, having earlier hit a two-month low at $44.87. Resurgent output from across the world and uncertainty around the global economy after Britain's unexpected vote to exit the European Union have weighed on oil.

When U.S. investment bank Goldman Sachs said last year that oil could fall as low as $20 per barrel, it assigned a fairly low probability to that scenario. Fast-forward five months and in some parts of the world the forecast has already proved correct. Canadian physical crude has been selling this week at below $20 per barrel, less than it costs to extract and transport. Traders in the options market, meanwhile, are taking protection against prices falling below $25. The developments reflect growing concerns that a market already awash in too much oil is now suffering the double-whammy of a sharp slowdown in U.S. and Chinese demand.