Bank of America Ordered Traders: No Oil Deals with BP Beyond June 2011
June 16th, 2010Via: Reuters:
Bank of America Merrill Lynch has ordered its traders not to enter into oil trades with BP Plc that extend beyond June 2011, a market source familiar with the directive told Reuters.
The order to the bank’s traders came from a high-level executive and was made on Monday, according to a source familiar with it. It told traders not to engage in trade with BP for contracts beyond one year from this month.
The directive didn’t state a reason for the limit on longer-duration trades with the oil company, which comes as the British oil giant scrambles to stop an oil spill in the U.S. Gulf of Mexico for which it could eventually face billions of dollars in economic liabilities.
Limiting the duration of trades with a counterparty is one way in which banks can seek to protect themselves against risk that a company will be unable to meet its long-term obligations.
A BofA spokesman declined comment.
BP spokesman Toby Odone said the company doesn’t comment on market rumors or speculation.
