Yet another financial institution elects to exit some or all of its commodities business, as Morgan Stanley sells its physical oil business to Castleton.
Castleton Commodities International will buy Morgan Stanley's physical oil business, the largest and oldest on Wall Street, vaulting the Connecticut-based merchant into the big leagues of global crude and fuel traders. In a long-awaited deal...Castleton will gain several dozen oil tank storage leases, physical oil supply and purchase contracts, and a team of about a hundred traders. The deal "aligns well with our goal of becoming a top-tier, global multi-commodity merchant," said CCI's Chief Executive and President William C. Reed II, a former Enron and hedge fund trader who has been running the firm since 2008. While Morgan Stanley will maintain its client-facing oil trading business, including both physical and paper transactions, the sale concludes the bank's years-long effort to divest a physical trading division that had come under intense regulatory scrutiny and suffered waning profitability.