Citigroup (NYSE:C) Building Up Commodity Unit in Europe, Asia

Citigroup Inc. (NYSE:C) said they're increasing the greatest number of commodity jobs for the company in Europe and Asia, as the North America market is considered the most "mature."

Stuart Staley, global commodity head for Citigroup said, “It’s been a leaner year than the past two years across the sector. We’re adding disproportionately to Asia and Europe whereas the U.S. business is the most mature part.”

Growing demand for energy in Asia has caused Citigroup and a number of its competitors to focus on shoring up its commodity units in Asia especially, as the growing middle class now has the disposable income to acquire more energy, generating more demand for natural gas, oil and coal.

Staley said Citigroup has hired close to 30 people in the commodity unit this year, as investors focus more on physical refined products and crude oil. A growing number of investors want to participate in physical transactions instead of commodity futures, he said.

Revenue generated from commodity transactions for Citigroup will be lower than in previous years, Staley concluded.

Market Ignores BP (NYSE:BP) After Permanently Killing Oil Well

The news that BP (NYSE:BP) killed their oil well was largely ignored by investors and traders, as their minds were on gold and other more important matters.

Thad Allen, the government point man for the BP oil crisis, announced on Sunday they have officially killed the oil well with the "bottom kill," the final step in the process.

Investors shrugged off the news today, although BP got a bump up early in the trading session, and is up to $38.40, gaining $0.37, or 0.97 percent, as of 12:01 PM EDT.

This was somewhat of an anti-climax concerning the well, as it hasn't leaked oil since July 15, and most considered it a foregone conclusion that the oil giant would be able to successfully complete the task.

BP now can fully focus on the legal aspects of the situation, which is picking speed, and also selling assets to raise capital to pay for legal losses and government fines.

Only a little over 3 million shares had traded hands at about noon today, down from the usual 30 million 3-month average.

JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS) Commodities Trading

Commodities Trading

The proposal by Commodity Futures Trading Commission head Gary Gensler could be a devasting blow to commodity traders like JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) which have counted on commodities trading as a major portion of their revenue, which in the case of Goldman Sachs is ten percent of their total revenue over the last several years.

For J.P. Morgan, they said in their recent letter to shareholders that the commodities trading business for the company has more than doubled since 2006.

Two important commodities sectors Gensler wants to put limits on are metals and oil contracts, allowing only double the volume of other commodity investors.

In other carnage Gensler wants to impose on the commodities market, he also is pushing to bring what he is calling more "transparency" to the over the counter trading markets by forcing investors to trade through a centralized, regulated clearinghouse.

Commodities Trading