New Wave Media

Oil price volatility jumped to its highest level in more than four months on Thursday as U.S. crude plunged 5 percent, after data from the U.S. government showed inventories fell less than expected, disappointing market bulls worried about a glut of crude supply.

 

The CBOE volatility index, a gauge of options premiums based on moves in the U.S. oil exchange traded fund , jumped from 41 to more than 58 - its highest level since March 2.

 

U.S. crude futures closed the session down $2.29, or 4.8 percent, at $45.14 a barrel, having earlier hit a two-month low at $44.87.

 

Resurgent output from across the world and uncertainty around the global economy after Britain's unexpected vote to exit the European Union have weighed on oil.

 

In the United States, the market is flooded with excess refined product, painting a grim picture for demand.

 

In addition to fundamental concerns, oil's technical support level around $45.80 was also breached on Thursday afternoon, traders said.


(Reporting by Devika Krishna Kumar in New York; Editing by Matthew Lewis)