OPEC policymakers seem confident in a sustained recovery of oil prices from this year’s lows as demand improves, but the derivatives market is geared for an alternative scenario: a fall below $50 a barrel by the end of the year. The level of volatility in the market, a broad measure of risk sentiment that determines the price of an option, has been edging higher. And for oil derivative contracts expiring in December, volatility has touched its highest in nearly four months, particularly for deeply bearish sell-options. Typically, December is when producers and consumers hedge their future requirements, prompting volatilities to rise. But it is also when the Organization of Petroleum Exporting Countries (OPEC) holds its twice-yearly meeting. OPEC’s secretary-general said on Thursday the group expects increasing oil demand […]