(Bloomberg) -- The surprise rally in crude prices prompted a rush among traders who were betting big on a drop in shares of Brazil's state-controlled oil giant Petroleo Brasileiro SA.
Monday's surge, prompted by an attack on a Saudi oil field, came just at the wrong time: equity options traded on the country's stock exchange expire on Monday.
For a trader who had a short position in a Petrobras call option, that means either buying Petrobras shares, scrapping the bearish bet, or borrowing a new stock to cover the losses and remaining a short-seller.
Preferred shares of Petrobras gained as much as 5.1% in Sao Paulo to the highest level since July, following the commodity higher. The strike on the Saudi field over the weekend knocked out about 5% of global supply and now all eyes are on how fast Saudi Arabia can restore production.
Read More: Saudi Arabia Says Iranian Weapons Used to Attack Oil Facilities
Brazil's benchmark Ibovespa index advanced 0.1% at 2:38 p.m. local time. The oil producer has a weight of about 12% in the index -- taking into account its preferred and common shares.
--With assistance from Sabrina Valle.
To contact the reporter on this story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net
To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Julia Leite, Catherine Larkin
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
