Crude oil price volatility has declined since its peak in March according to a report from the EIA on May 10, 2016.
Source : EIA
During the first three months of 2016, crude oil prices were relatively more volatile than in recent history. The elevated volatility occurred when overall oil prices were low, and volatility was driven by high uncertainty related to supply, demand, and inventories. Prices have risen as concerns about future economic growth have abated and as inventory growth has slowed since the start of the year.
The 30-day measure of oil price volatility (calculated as the standard deviation of daily percent changes in crude oil prices over the previous 30 trading days) reached a high of 45% on March 4 before falling to 33% on April 18. Volatility levels in March were the highest since early 2009, when crude oil prices were falling in response to the financial crisis and to a drop in demand for petroleum products. The recent decline in oil prices resulted in volatility levels closer to the 2015 average of 27%.
Daily volatility is often driven by the release of new economic or supply information, changes in market expectations, or unanticipated events that can cause large price adjustments, according to the EIA report.
