The benefits of cheaper oil for the biggest U.S. banks — a jump in trading and consumers with more money to spend — will outweigh the costs, according to executives and analysts.
The collapse of crude has drawn hedgers and speculators back into the market, boosting volumes and volatility, KBW Inc. analysts wrote in a Dec. 11 note. Retail banking also may benefit from more confident consumers as lower energy costs bring a $900 average windfall for each U.S. household, Citigroup Inc. Chief Executive Officer Michael Corbat said last week.
Before plunging more than 45 percent in the past six months, the price of crude had remained fairly stable for the past few years and trading volume had declined. The recent surge in activity could lead to the first annual jump in revenue for commodities trading desks in three years.