Oil Steadies Ahead of US Stockpile Data as Volatility Declines
What data is expected to be released by the US Energy Information Administration?
The US Energy Information Administration (EIA) is expected to release weekly inventory data that may show another rise in nationwide crude oil inventories. This data provides insights into the supply and demand dynamics of the oil market and helps traders make informed decisions. The release of this data is often accompanied by fluctuations in oil prices, as it can signal changes in the market balance. Additionally, the EIA publishes various reports and statistics on energy production, consumption, and prices across different sectors and regions, contributing to a better understanding of the overall energy landscape5.
What is the current level of implied volatility for Brent crude?
The current level of implied volatility for Brent crude oil is at a six-year low. This decline in volatility comes as oil prices have steadied ahead of the release of weekly inventory data from the US, and futures have been tracking wider equity markets. The low-volume trading session due to a US holiday also contributed to the drop in implied volatility.
What has influenced the tracking of futures in wider equity markets?
The tracking of futures in wider equity markets has been influenced by a variety of factors. In the context provided, the absence of other drivers has led futures to track wider equity markets. This has been accompanied by stock markets losing some steam, contributing to the listless trading of crude oil and pushing implied volatility for Brent to a six-year low. Additionally, oil prices have been affected by the OPEC+ decision to extend supply cuts and the demand outlook, with refineries in Asia bringing back some capacity after maintenance despite poor margins.