(Bloomberg) -- Goldman Sachs Group Inc.’s commodities business, once the crown jewel of its trading operation, is rediscovering its old touch in turbulent markets.

The commodities unit generated more than $1 billion in revenue this year through May, pouncing on wild swings for its best start in a decade, according to people with knowledge of the matter. Much of the boost came from oil trading overseen by Anthony Dewell and Qin Xiao, who correctly positioned their desks for the collapse in prices, the people said, asking not to be identified discussing confidential information.

The unprecedented mayhem in oil markets sent crude plunging below zero, left corporate risk managers scrambling and forced retail investors to unwind bets. But it presented an opportunity for Wall Street traders to score big gains. The windfall is a redemption for the unit, which less than two years ago faced an uncertain future under new boss David Solomon, who frowned upon a business that wasn’t making enough money.

“We are market makers and a client franchise business,” Goldman spokesman Patrick Lenihan said. “And now as always we do all we can to help our clients manage their risk.”

Wall Street traders have benefited this year as volatility spurred transactions, helping big banks offset slowdowns in other business lines affected by a global pandemic and worsening economy.

Some of Goldman’s early gains from that turmoil were under Xiao. The Singapore-based partner, known as QX to colleagues, oversees the commodities business in Asia. Even as stocks ticked toward record highs, Xiao anticipated the risk of an economic meltdown. It soon came to pass as the pandemic took hold in Asia and went global. He was positioned accordingly for oil and a variety of related products as prices slumped by two-thirds in the first quarter.

Dewell, as Xiao’s London-based counterpart, ran trades that correctly anticipated a collapse in the WTI futures market in April as storage tanks filled and prices spiraled toward zero. That move prompted a wave of forced selling from investor products such as exchange-traded funds that weren’t designed with the possibility of negative prices in mind.

Glory Days

Stiffer rules aimed at reducing risks after the 2008 crisis mean banks are no longer allowed to have dedicated proprietary-trading teams. But even when making markets, most trading books tend to have an inherent directional bet that can pay off in periods of exaggerated price movements. In Goldman’s case, in simplistic terms, the group was positioned short oil and reaped big gains.

Both Dewell and Xiao report to Ed Emerson, the New York-based global head of the business, who’s also an oil trader by background. Emerson and Dewell sat back to back for much of the last decade before Dewell was sent to London to help run the business in that region.

Goldman’s gains are reminiscent of an era a decade ago when the unit generated annual revenue of around $3 billion. But it later fell out of favor as those earnings slumped, and it even faced the risk of getting dismantled as Solomon’s team took over and questioned its necessity.

Ultimately, after trading leaders pushed back against some of the more extreme ideas, the new management backed off, carried out modest cuts and publicly affirmed support for the division.

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