With the price of oil finally touching $50 a barrel this week, producers and speculators have been loading up on options to protect themselves from a downside risk, signaling there are still some jitters surrounding the recent rally. Deep out-of-the-money put options – options that would not be profitable until a substantial pullback in the price of oil – have shown a marked increase in implied volatility, a sign that producers are locking in prices close to levels for them to be profitable while speculators are protecting themselves from a potential correction. U.S. crude has nearly doubled from 12-year lows touched in February. Market sources say much of that rally was fueled by the perception of the improving fundamental picture, with falling U.S. output and global supply outages helping to rebalance a market reeling from oversupply for nearly two years. That has prompted hedging among producers. The current put […]