Rothschild enters “under-banked” oil risk sector
Rothschild has entered the oil risk management sector, offering over-the-counter risk management products worldwide across all oil commodities to oil producers, consumers and utilities.
Fraenkel believes the oil risk management sector is “under banked”, in that there are very few financial institutions offering specialist oil services. “If a customer wants to do an energy hedge, he will typically have to talk to the interest rate or FX desk at his bank - which may not have proven expertise in the energy area.”
He says customers will prefer to deal with banks, rather than pure energy companies, citing a “comfort factor” afforded by reputation, regulation and a strong balance sheet. The group aims to capitalise on Rothschild’s existing customers as well as seek new clients.
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