North Sea Brent crude oil—the most important global benchmark for waterborne light sweet crude—traded in the narrowest price range since 2006 last year, according to the US Energy Information Administration. Historical price volatility in 2013 also was at its lowest level in more than a decade.
The minimum closing price for 2013 was $97.69/bbl on Apr. 17, and the maximum closing price was $118.90/bbl on Feb. 8, representing a trading range of $21.21 for the year.
Brent oil price volatility was dramatically high during the fall of 2008 and early 2009. This was caused by rapid transitions from concerns over global oil supply and strong increases in emerging-market oil demand to concerns associated with a severe global economic downturn.
Demand-side uncertainty sustained in 2010 as the European debt crisis emerged and the recovery from the economic downturn was not as robust as expected. In 2011, oil price volatility increased again due to supply shocks from the Arab Spring and the Libyan supply outages, which removed as much as 1 million b/d from world markets, but volatility remained well below the levels reached during 2008 and 2009.
“Price volatility in 2013 was at its lowest level over the 2006-13 period, as many of the factors that had been driving instability in oil prices were mitigated. Despite Libyan outages similar to those in 2011, Saudi Arabia maintained its production to smooth out the effects. Rising US oil production also helped offset some of the losses of oil on world markets, resulting in supply being more in line with market expectations. The economic recovery became more evident as the European debt crisis waned and US unemployment fell,” EIA said.