"The recent increase in crude-oil volatility and options activity
suggests that" West Texas Intermediate "could easily" top 2008's
record $145.29/barrel by year's end, says asset-management firm Factor
Advisors.
Based on options prices and implied volatility, it gives about 30%
odds of a new record in 2012 amid
Mideast
uncertainty and US economic-growth prospects. By the same token, there are
similar odds that crude could fall 39%, the amount futures would need to rise
to set the new record.
A drop of that size would put oil at $75, matching its
2011 low. Meanwhile, options prices show just a 9% chance that the S&P 500
could rise or fall 39% before 2013 arrives.