Goldman Sachs generates over $1bn after oil price collapse
Goldman Sachs’ commodities business reportedly generated more than $1bn in revenue this year after the collapse in oil prices in April.
The unit benefited from the turbulent market and generated more than $1bn to May, its best start in a decade, according to Bloomberg. Most of the boost reportedly came from oil trading overseen by Anthony Dewell and Qin Xiao, who positioned for a collapse in oil prices.
In April, turbulence in the oil markets sent crude below zero in what became the market’s worst crisis in a generation.
Bloomberg reported that some of the early gains were made under Qin Xiao, who oversees Goldman’s commodities business in Asia from Singapore. He reportedly anticipated the market turbulence ahead of the pandemic and was positioned well for the slump in oil prices.
London-based Goldman partner Anthony Dewell also predicted a collapse in the US benchmark West Texas Intermediate futures market in April, according to Bloomberg.
Oil prices have rallied since the collapse touching $40 per barrel for the first time since March last week, amid hopes that Opec would extend its production cuts.
West Texas Intermediate gained to $36.83, approaching its highest levels in three months.
Prices were up again on Monday after Opec and its allies agreed to extend their current crude production cut agreement for another month.
A spokesperson for Goldman Sachs said: “We are market makers and a client franchise business, and now as always we do all we can to help our clients manage their risk.”