Traders increase call options to prevent oil prices from hitting the $100 mark

Oil traders are increasingly hedging the risk of surging oil prices as the market prepares for a possible rise in oil prices to $100 a barrel. Whether oil prices remain high depends on continued supply tightness throughout the year. Recent changes in market indicators suggest that demand for Brent and West Texas Intermediate calls outstrips put options, with data showing a sharp reversal in the second month of bullish bias for both West Texas Intermediate and Brent this week, the first reversal since last November. This is different from the usual scenario, where the oil options market typically exhibits bearishness to hedge against falling prices. This is because the current rally in crude oil prices is underpinned by strong fundamentals, and the historical trend is also showing further upward momentum, with Brent and West Texas Intermediate crude rising by an average of 7.2% and 5.8% respectively in April over the past decade.