Low crude volatility to bolster spread trades, say analysts

Volatility arrows
Low volatility ahead, say analysts

Analysts expect the current trend of muted crude oil volatility to continue throughout 2013, encouraging market participants to take advantage of relative value trades, rather than making outright bets on the product.

Volatility in crude oil has declined significantly since the beginning of 2010. Data from Atlanta-based exchange Ice show one-year realised volatility for the exchange’s front-month Brent crude futures contract stood at 43.72% at the beginning of 2010. It subsequently dropped to ju