This is exchanges of Goldman Sachs where we discuss developments currently shaping markets, industries, and the global economy.

I'm Jake Stewart, global head of corporate communications here at the firm.

Today's episode is all about commodities, from what's been driving recent volatility,

to the role of shale in 2019 to the impact of

geopolitical risks around trade and OPEC and much, much more. To talk through all of this

we're joined by our very own Jeff Curry Globalhead of of commodities research and Goldman Sachs investment research.

Jeff, welcome to the program.

Great, thanks.

It's a pleasure to be here.

So let's start with the big sell-off that closed out the year 2018 and the rebound we've seen since what's driving these big swings in

commodity prices and do you expect that to continue in 2019? Well let's talk about

what was fundamental and then what was sentiment.

And if we begin with the fundamental shifts

with energy, you had US foreign policy

that disappointed many of the oil producers

in terms of providing sanctions around Iranian exports.

So I would say that was the actual trigger event.

You look at the picture, you have much more supply out of Iran than what most people initially thought that created the initial

sell-off. But it involved many more assets than oil within about two to three weeks later.

You had the equity markets, the credit markets, all of them

beginning to participate in a large sell-off. That I would chalk up to more sentiment than

fundamentals.

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