Factbox: Wall Street and commodity risk - Morgan Stanley measure slips

The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California September 24, 2013. REUTERS/Mike Blake/File Photo

(Reuters) - Morgan Stanley Inc’s commodity trading risk measure, known as Value-at-Risk (VaR), fell to its lowest in at least three years in the quarter through June, the bank said on Wednesday, as the Wall Street bank reported higher commodities revenue.

The bank’s daily average VaR indicator was $10 million in the second quarter, down $1 million from the previous quarter and compared with $16 million a year earlier.

The VaR is a risk-reward indicator that measures the commodities exposure of Wall Street banks.

Earlier Wednesday Morgan Stanley reported better-than-expected quarterly results boosted by bond trading revenue.

Fixed income and commodities sales and trading net revenues totaled $1.3 billion, up from $873 million in the prior quarter and almost unchanged from last year, even after selling its oil merchant business in the fourth quarter of 2015.

Wall Street banks typically group commodities revenue under the fixed income category and do not break out the sector.

In the quarter, crude oil prices continued to recover, piercing $50 per barrel in June on hopes that output cuts by major producers would help erode the global glut, while gold soared to above $1,350 an ounce, its highest in more than two years, as speculators piled on bullish safe-haven bets.

Last week, JPMorgan Chase & Co reported that its VaR was unchanged at $9 million in the second quarter, while Goldman Sachs Group Inc’s measure rose to its highest in 18 months in the quarter.

Reporting by Josephine Mason; Editing by Jeffrey Benkoe