BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil

2019 Brent crude oil volatility: February outlook

Natural Gas | Oil

So what happened at MPGC 2019?

Natural Gas | Oil

Platts Scenario Planning Service

Natural Gas | Oil | Refined Products | Shipping | Marine Fuels | Tankers

Bunker and Residual Fuel Conference, 16th Annual

Oil

Trump talks oil supply, Iran sanctions with Abu Dhabi crown prince: White House

Watch: 2019 Brent crude oil volatility: February outlook

Dated Brent crude oil climbed in January, supported by good arbitrage opportunities to the Far East; a narrow Brent/Dubai EFS, and relatively good domestic demand. S&P Global Platts quantitative analyst, Vito Turitto, reports on how the uptrend in the Brent physical market arose, despite more than 800,000 b/d of WTI Midland crude being expected to arrive into Europe during February.

London Oil & Energy Forum | London Hilton | February 25, 2019

Join our respected editors and analysts as they share insights on the latest oil and energy industry developments, market outlooks and in-depth analysis of major trends.

Register now
View Full Transcript

Welcome to The Snapshot - our series which examines the forces shaping and driving global commodities markets today.

Dated Brent moved higher in the month of January supported by good arbitrage opportunities to the Far East, a rather narrow Brent/Dubai EFS and a relatively good domestic demand. The uptrend in the Brent physical market happened despite more than 800,000 b/d of WTI Midland are expected to arrive in Europe in the month of February.

Internationally, geopolitical tensions kept weighing on the crude oil market, in fact, the majority of market participants are focusing on tensions between US and Venezuela and trade talks between the United States and China.

Furthermore, the International Monetary Fund has recently lowered its forecast for global growth by 0.2% from the 3.5% it projected in October. The revision was triggered by the slowdown in China's GDP expansion and the weak economic outlook for emerging markets.

However, if geopolitics is pushing crude oil prices higher the fact that the US output is almost as high as 12 million b/d, according to the Energy Information Administration, and its export averaged 3.19 million b/d in January are certainly factors that are contributing to put a cap on global crude prices.

The Volatility Premium analysis indicates that the volatility curves are still very high, however, they have significantly declined in recent weeks and the downtrend is probably going to continue. This market scenario is likely to support a higher degree of market stability and a slow price uptrend.

The Probability Distribution analysis implies that the fluctuation rate is trading within the 35 and 40% range which is one of the highest ever achieved by the Brent market over the last two years. Therefore, it is reasonable to assume that the volatility will tend to decrease in coming weeks and achieve the 30 - 35% range, where it has more than 11% to settle.

Finally, the Volatility Cones analysis shows that both the monthly and bi-monthly volatilities are falling back towards the medium range curve implying that market participants are pricing less risk into the market. Consequently, the decrease in monthly volatility should favor a slow price uptrend, although short-term market retracements should be expected

Until next time on the Snapshot - we'll be keeping an eye on the markets.