Crude oil options volatility sank as traders, caught off-guard by the rally in futures today, bet that price swings will be limited.
Gasoline advanced as supplies in the New York Harbor area, where the Nymex contract is delivered, are the lowest in 11 months.
Brent crude put options rose as the international benchmark’s premium over West Texas Intermediate crude widened.
Gasoline and ultra low sulfur diesel followed crude futures higher as stronger manufacturing data from China and the European Union boosted speculation that fuel demand may improve.
Crude volatility fell on speculation that the accord world powers reached with Iran may reduce Middle East tensions, lessening price swings, and as traders closed positions before the U.S. Thanksgiving holiday.
Ultra low sulfur diesel rose on speculation that U.S. distillate inventories fell last week to a five-year low.
Gasoline followed Brent crude lower after an accord that limits Iran’s nuclear program and eases some economic sanctions.
Crude options volatility rose as the underlying futures retreated for a second day.
The average price for regular gasoline at U.S. pumps rose 3.41 cents in the past two weeks to $3.2517 a gallon, according to Lundberg Survey Inc.
U.S. travel during the Thanksgiving holiday weekend will fall for the first time in five years, dropping 1.5 percent from 2012, as trips by automobile and airplane decline, AAA said today.