Barclays' energy trading exit raises concerns
The departure of yet another top-five player puts pressure on oil producers worried that falling liquidity means now they cannot use derivatives to hedge risk
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BRITISH bank Barclays Plc has joined the list of top banks to exit energy trading, an exodus that analysts say raises concern among oil producers that falling liquidity means they cannot use derivatives for their basic function: to hedge risk by locking in future prices.
Wall Street firms have scaled back in commodity markets since the 2008 financial crisis from owning physical assets or taking positions in the market in the face of regulatory scrutiny. The banks were big players in the market for derivatives years into the future.
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