(Bloomberg) -- Oil prices are facing some of the largest intraday swings in months due to a tumultuous macroeconomic outlook, Libyan supply disruptions and softer market balances into the end of the year.
Brent futures have traded in a range spanning $2.29 on an average daily basis in August, the widest since January. Another gauge of price swings, 30-day historical volatility, is also the highest since January.
Traders are bracing for what could be a bumpy ride toward the end of the year, with the OPEC+ alliance expected to bring back barrels as it begins scaling back its supply curbs.
Until recently oil and commodity markets had spent much of the year caught in a sustained low-volatility environment. Crude markets were largely kept in a narrow range by OPEC+ supply cuts and the resultant spare production capacity that they offered.
However, August has been far bumpier. A collapse in financial markets to start the month, along with the ensuing recovery, has been followed by significant disruption to supplies in Libya in recent days.
That — coupled with a souring in sentiment over the outlook for next year and weaker consumption in China, the world’s largest importer — has spurred a fresh round of price volatility over the Northern Hemisphere’s summer.
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