Egypt Said to Choose Citi, JP Morgan for Oil Price Hedging Plan

CAIRO (Capital Markets in Africa) – Egypt has selected Citigroup Inc. and JP Morgan Chase & Co. to hedge against fluctuations in global oil prices, two Egyptian officials said.

Egypt announced several weeks ago that it was seeking to protect itself against sudden increases in the price of crude oil and was negotiating with global banks. It expects to begin hedging at the end of this year or early in 2019, the officials said, speaking on condition of anonymity because the information had yet to be announced by the government.

Finance Minister Mohamed Maait told a conference in Cairo earlier on Tuesday that Egypt, one of the world’s largest importers of wheat, was also considering hedging against volatility in the price of that commodity.

Egypt was already talking to at least one bank about the potential for wheat price hedging, but was still in the early stages of that plan, one of the officials said.

Egypt based its fiscal 2018-2019 budget on oil at $67 a barrel, but prices have spiked above that level. Benchmark Brent was trading around $79 a barrel on Tuesday.

Source: Bloomberg Business News