Citigroup is planning to almost double the size of its global commodities trading team and increase its range of products by the end of the year as competition intensifies between banks in the sector.
Citigroup plans to increase the number of traders handling oil, metals and other commodities from 85 to 150 by the end of this year, according to John Casaudoumecq, the bank's global head of commodities.
Casaudoumecq, who is also chief operating officer of Citigroup's global fixed income business, told Bloomberg the bank plans to expand its North American power and gas trading business into Europe, and to start trading coal and carbon dioxide emissions.
"We are in a long-term commodities cycle, which may last 15 to 20 years. Our goal is to take what we do in interest rates, foreign exchange and credit risk and apply it to commodities."
Surging demand for oil and commodities has fueled record prices and attracted investment banks and other investors into the sector. Citigroup generated revenue of $910 million from principal commodity trading last year, more than double the revenue of 2004.
Other banks have also taken steps to boost their commodities trading efforts. Australian bank Macquarie last year shifted its global commodities trading desk from Sydney to London. Barclays Capital is planning to hire up to 40 staff in its commodities unit, and Credit Suisse launched an oil trading joint venture with trading firm Glencore International in February.