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Dec 5, 2013

Deutsche Bank quits commodities under regulatory pressure

LONDON (Reuters) – Deutsche Bank (DBKGn.DE: Quote, Profile, Research) pulled the plug on its global commodities trading business on Thursday, cutting 200 jobs as it becomes the first major bank to exit the once lucrative sector due to toughening regulations and diminished profits.

Germany’s largest bank, which was one of the top-five financial players in commodities, will cease energy, agriculture, base metals, coal and iron ore trading, it said in a statement, retaining only precious metals and a limited number of financial derivatives traders.

Dec 5, 2013

Deutsche Bank to quit commodities trading

LONDON, Dec 5 (Reuters) – Deutsche Bank said on
Thursday it is exiting the majority of its global commodity
business due to rising regulatory pressures, becoming the latest
bank to sell or scale back its operations in the once lucrative

Deutsche Bank will exit energy, agriculture, base metals and
dry bulk trading, it said on its website, retaining only
precious metals and a limited number of financial derivatives

Dec 3, 2013

Brent crude oil rises towards $112, near 11-week high

LONDON, Dec 3 (Reuters) – Brent crude rose towards $112 a
barrel on Tuesday, just off an 11-week high hit in the previous
session, as strong economic data boosted the demand outlook and
ongoing outages in Libya maintained concerns about supplies.

Brent prices rose almost 2 percent on Monday after data
showed U.S. factory activity expanded last month at its fastest
pace in 2-1/2 years. That came after a report showing
manufacturing growth in China, the world’s No. 2 oil consumer,
hit an 18-month high in November.

Nov 27, 2013

Exclusive – JPMorgan tried but failed to satisfy Fed on metals warehousing: letters

LONDON/NEW YORK (Reuters) – The U.S. Federal Reserve was pressing JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) to distance itself from its metals warehousing business more than a year ago, documents seen by Reuters show, long before the issue became a focal point in the debate over Wall Street’s role in physical commodities trading.

A series of letters between JPMorgan’s lawyers and the Fed, released to Reuters through a Freedom of Information Act request, show Wall Street’s primary regulator took a tough stance on the bank’s efforts to hold onto the global network of Henry Bath & Sons warehouses, part of the larger RBS Sempra commodity trading business it bought in mid-2010.

Nov 22, 2013

Goldman to sell uranium trading desk as Fed review looms

NEW YORK/LONDON, Nov 22 (Reuters) – U.S. bank Goldman Sachs
Group Inc has put its uranium trading business up for
sale, a source familiar with the matter said on Friday, the
latest sign that Wall Street’s most storied commodity trader is
paring back parts of the business.

The move comes as other U.S. banks, including JPMorgan Chase
& Co and Morgan Stanley, look to exit physical
commodity trading in the wake of increased government scrutiny,
squeezed trading margins and forecasts for tepid demand in
certain markets.

Nov 19, 2013

Insight: Wall Street uses ‘merchant’ workaround to cling to commodity assets

NEW YORK/LONDON (Reuters) – Wall Street’s commodity trading giants are using a 14-year-old law to hold on to their oil storage terminals and metals warehouses a little bit longer, even as the Federal Reserve considers cracking down on such investments.

Under the so-called “merchant” authority, U.S. financial holding companies are allowed to invest their own capital in just about any type of business – so long as they do so at arm’s length, for purely passive financial purposes, and for no more than 10 years. Banks have been allowed to take small equity stakes for decades, but a controversial 1999 banking law vastly expanded the scope of such investments.

Nov 5, 2013

Trader Gunvor studying U.S. expansion, JPM’s business

LONDON (Reuters) – Commodity merchant Gunvor, long known in the industry as one of the key traders of Russian oil, is studying growing opportunities in North America resulting from the shale oil boom and is looking at select trading assets including parts of JPMorgan Chase & Co.’s (JPM.N: Quote, Profile, Research, Stock Buzz) business.

Speaking at the Reuters Global Commodities Summit on Tuesday, Gunvor chief executive and co-founder Torbjorn Tornqvist said the firm saw opportunities in North America and had been in contact with the Wall Street bank, which put its physical trading business up for sale this summer for around $3.3 billion.

Oct 30, 2013

Brent crude firm near $109 on Libyan supply disruptions

LONDON, Oct 30 (Reuters) – Brent crude held firm near $109 a
barrel on Wednesday as a bigger-than-expected increase in oil
inventories in the United States was overshadowed by export
disruptions in Libya.

Traders were looking ahead to comments from a U.S. Federal
Reserve policy meeting that ends later in the day, but any
impact on oil prices may be muted. The U.S. central bank widely
expected to maintain its massive economic stimulus programme.

Oct 28, 2013

Fed to outline bank commodity policy early 2014 -source

WASHINGTON/LONDON, Oct 28 (Reuters) – The U.S. Federal
Reserve may not unveil its plans for regulating Wall Street’s
commodity trading business until early next year, a person
briefed on the matter said, deferring a decision on the
politically fraught debate into 2014.

The timing confounds any expectations that the regulator
would make its views known before a second Senate hearing
expected next month into the rigging of aluminum and other
markets, at which Fed officials are due to testify.

Oct 18, 2013

Morgan Stanley commodity revenues up ‘modestly’ as bank waits on Fed

LONDON (Reuters) – Morgan Stanley’s commodity revenues were up modestly in the third quarter, the bank said on Friday, extending a mild recovery, as the company awaits a decision from the Federal Reserve on the future of its physical trading business.

Speaking on the bank’s third-quarter earnings call, Chief Financial Officer Ruth Porat said that a recovery in client activity had bolstered commodities for the second straight quarter, following a 77 percent collapse in revenue year-on-year in the first three months of 2013.