Oil Options Traders Look to Protect Against Rising Crude Prices as Middle East Tensions Escalate

Oil options traders are increasingly looking to protect against rising crude prices as tensions escalate in the Middle East. Near-term market gauges for Brent and US crude have flipped over the past week to reflect more demand for bullish call options than bearish puts. The WTI second-month call skew, which shows what traders will pay for options that profit from a rise in prices versus a decline, switched on Tuesday for the first time since November, according to data compiled by Bloomberg. Oil options markets typically skew bearish as producers seek to protect against price drops.