Goldman Sachs traders make $1 billion betting against oil prices

Traders at Goldman Sachs have made $1 billion (£785 million) betting against oil prices this year.

The commodities team generated the revenue as oil prices tumbled following the outbreak of coronavirus which has put demand at rock bottom.

The dramatic sell-off started in March and at one point saw US crude futures priced deep in negative territory as panicked traders bailed out of positions upon realising that many would be forced to take physical delivery of oil without a place to put the barrels.

Numerous funds and brokerages suffered heavy losses in the selloff, sparked by the slump in car and air travel due to the 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.

But Goldman aren’t the only ones to make hay.

Hedge fund manager Pierre Andurand has also made a handsome return in recent months.

His Knisghtsbridge based fund Andurand Capital bet that in February, when oil was still close to $55 a barrel, that prices would turn negative.