WTI Crude Oil

A 4x increase in the average daily price move surges the hedging cost manyfold, since both call and put option values rise due to higher implied volatility. Refiners, Airlines pay more for protection, and may shift toward collars, spreads, or reduced hedge ratios to manage cost. Market makers widen bid-ask spreads to compensate for the risk of large, fast moves, which can reduce liquidity in options and some futures straddles.

NYMEX Light Sweet Crude Oil (WTI) Continues Futures contract.

NYMEX WTI Futures & CBOE Crude Oil ETF Volatility Index - Source: FRED, Chicago Board Options Exchange

WTI Crude Oil Seasonality Chart (O#CL) - Multi-year overlay

Since Feb27, 2026, the average daily price movement has surged to $8.226/bbl. Prior to the date (since Jan 1, 2026), the average daily price move was $2.098/bbl, roughly one fourth of the current level. According to a FRED Federal Reserve Bank of St. Louis chart, 30-day Implied Volatility for crude oil has been consistently high for almost the past three months, making hedging more expensive, the market more sensitive to shocks, and generally more nervous, even when the spot price does not move in a clear trend. A seasonality chart also confirms the unusual surge in implied volatility.