Oil options cheapest in three years as OPEC meeting approaches

Betting on price swings in oil costs the least in three years before next week’s OPEC meeting. Implied volatility of options on second-month West Texas Intermediate futures sank to 20.94% Friday, the lowest level since October 2014, according to data compiled by Bloomberg.

Volatility has been sinking as futures move steadily higher, with prices reaching $59/bbl for the first time in more than two years.

This week’s cheap options may prove a good deal, if the OPEC/non-OPEC meeting next week brings any surprises that send prices gyrating.

The organization and Russia are said to have agreed on the framework of an extension of the oil supply cuts beyond March. But there still are details to be hammered out.

Source: World Oil

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