Oil is pulling away from the market’s biggest storm in seven years.
A measure of price volatility has tumbled from the highest level since January 2009 as the market frenzy eases amid a potential pact between the world’s largest producers to freeze output.
Investors in February fixated on how and when Saudi Arabia would engage other producers clamoring for a way to boost prices. Crude in New York crashed by about half since the biggest producer in the Organization of Petroleum Exporting Countries led the group’s 2014 decision to not to cut output in the face of a global glut, opting instead to keep taps open to force out higher-cost rivals.
From the “successful” talks between Saudi Arabian Oil Minister Ali al-Naimi and his Venezuelan counterpart early last month, to the Feb. 16 Saudi-Russia output freeze announcement, to Iran’s rejection of the plan as “ridiculous,” the CBOE Crude Oil Volatility Index averaged the highest level since 2009. Since the pact was announced, the measure of expectations of price swings has tumbled to the lowest in almost two months while oil has gained about 18 percent to trade near $35. Read more