LONDON, Feb 2 (Reuters) - Citigroup said investmentbanks will remain the main players in hedging energy productseven though oil majors are carving out a role in the sector assome banks cut their exposure.
Citi, Goldman Sachs and JP Morgan are the topthree banks active in commodities trading, while peers such asBarclays and Deutsche Bank have cut back following the 2007-9financial crisis and the introduction of the Dodd-Frankregulations.
Last year, oil major Royal Dutch Shell made asplash by becoming one of the first non-bank counterpartiesinvolved in the Mexican government 2017 oil hedging programme,the world's biggest.
"It's natural that they (oil majors) will try to step intothat space a little bit because so many banks have been pullingout," Jose Cogolludo, Citi's global head of sales andorigination for commodities, told reporters on Thursday.
Stuart Staley, the global head of commodities, said riskmanagement would be more for the likes of trading units at Shelland BP than the independent traders such as Vitol or Trafigura,who would be more involved in pre-payments deals.
"The integrated majors, because of their credit rating, insome cases can provide a similar security to a project orgovernment or company by providing hedging. In some sense, Iwould bucket BP and Shell differently," Staley said.
He said the moves were not limited to oil but involvedhedging for the U.S. and European power markets although he saidhe expected banks to remain the leading players in riskmanagement and hedging. (Reporting By Julia Payne and Dmitry Zhdannikov; Editing bySusan Fenton)
