Most Volatile Oil Market Since ’09 Seen Persisting on Oversupply

(Bloomberg) — The most volatile oil market in almost six years is forecast to continue seesawing as a global glut that drove prices lower last year persists for at least the first half of 2015. The CBOE Crude Oil Volatility Index, which measures price fluctuations using options of the U.S. Oil Fund, ended at 62.73 on Wednesday, the highest level since April 2009. Another measure shows West Texas Intermediate, the benchmark U.S. crude contract, is fluctuating the most in almost 3 1/2 years. “There is a clash between future expectations of where oil may end up in terms of fundamentals and what we’re seeing on the ground right now,” Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said by phone. “That’s why you’re getting that whipsaw affect in prices at the moment. This is something that we’re going to have to get used to, at least in the foreseeable future.” Oil halted its biggest four-day rally since January 2009 on Wednesday after U.S. government data showed crude stockpiles in the world’s largest consumer expanded to the highest level since at least 1982. Even amid the volatility, investors continue to bet on a … continue reading

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