Goldman Sachs expects a commodities supercycle driven by China and the capital flight from energy markets and investment this month after concerns triggered by the banking sector, the U.S. bank’s head of commodities said.
“As losses mounted, it spilled into commodities,” Jeff Currie, global head of commodities for Goldman Sachs, told the Financial Times Commodities Global Summit on Tuesday.
“Historically, when you have this kind of scarring event, it takes months to get capital back… We will still get a deficit by June and it will drive oil prices higher.”
Oil prices tanked to 15-month lows as a crisis at Switzerland’s second-biggest bank Credit Suisse, which followed the collapse of two U.S. lenders, led to a takeover by bigger Swiss rival UBS.
Currie emphasised the hit was to the supply side rather than demand and he remains very bullish on copper.
“The deposits have already left…Cash is going into money markets not into the banks.”
Currie added that concerns about the banking sector were centred around U.S. regional banks while Europe was relatively safe from contagion.