Goldman Sees Gas and Power Rebound From 2017 Commodities Debacle

(Bloomberg) -- After a cataclysmic 2017, Goldman Sachs Group Inc.’s commodities trading business staged a recovery in this year’s first quarter, helping the bank generate its best revenue in three years.

Goldman’s fixed-income unit, which includes the trading business, saw a 23 percent jump in sales from a year earlier to $2.07 billion, the New York-based bank said on Tuesday. Within that unit, “commodities increased significantly versus the fourth quarter, reflecting improved performance particularly in natural gas and power,” Chief Financial Officer Marty Chavez told analysts on a conference call.

That’s a turnaround from last year, when Goldman endured the worst annual commodities performance in its 19-year history as a publicly traded company, with net revenues down about 75 percent and gas and power losses leading the way. The bank’s chief operating officer for commodities and global head of commodities both left the business in recent months, along with several other traders at the struggling unit.

To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net.

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Christine Buurma

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