By Devika Krishna Kumar
(Reuters) - Goldman Sachs Group Inc (N:GS) commodities unit generated more than $1 billion in revenue this year through May as traders positioned their bets for the collapse in oil prices, a source familiar with the group's finances said on Wednesday.
The gains were largely driven by oil trading, the source said, though other commodities, including natural gas, power and precious metals contributed, the source said.
Oil prices plunged to their lowest in years in a dramatic selloff at the start of March. U.S. crude futures at one point fell deep into negative territory as panicked traders bailed out of positions after realizing many would be forced to take physical delivery of oil without a place to put the barrels.
Most of Goldman's boost came from oil trading overseen by Singapore-based partner Qin Xiao and Anthony Dewell in London, amid the collapse in oil prices, according to Bloomberg News, which first reported the $1 billion figure, citing people with knowledge of the matter.
Numerous funds and brokerages suffered heavy losses in the selloff, sparked by a slump in car and air travel amid lockdowns to curb the spread of the new coronavirus as well as an argument between Saudi Arabia and Russia over production volumes.
"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," Goldman spokesman Patrick Lenihan told Reuters.