Brazil’s state-owned oil company Petroleo Brasileiro said it was spending $320 million on put options hedging part of its output at $60 per barrel considering Brent prices, in a move to lock in some of this year’s price gains.

"The strategy is to hedge the export operations expected for the year, that way partially protecting the company’s operational cash flow," the company said in a securities filing. The options expire by the end of the year.

The filing confirmed a Reuters report this week that said Petrobras, as the company is known, was hedging oil at $60.

The put options give Petrobras the right to deliver oil at $60, but not the obligation to do so. If prices remain above that level, the company can let the options expire without exercising that right, although in that case they would lose the $320 million price they paid for the options.

Petrobras is spending less this year than it did in 2018 on hedging. Last year, the company had put options covering 128 million barrels, at an exercise price of $65 per barrel.

Thadeu Silva, an oil analyst at broker INTL FCStone, said Petrobras’ hedging strategy for this year is adequate