Goldman poised to make $100 million profit off Texas deep freeze - Bloomberg News
Reuters
Published Mar 05, 2021 10:30AM ET
Updated Mar 05, 2021 05:20PM ET
(Reuters) - Traders at Goldman Sachs Group Inc (NYSE:GS) could earn roughly $100 million in profit from the winter storm last month that left many across Texas and other southern U.S. states without electricity, clean water and heat, Bloomberg News reported on Friday.
The Wall Street bank's earnings from the physical sale of power and natural gas and financial hedges after spot prices jumped, could top $200 million on paper, but they will likely take a significant write down, Bloomberg reported.
Texas's energy market saw extreme volatility in mid-February when a deep freeze reduced supplies, sending the cost of emergency fuel and power sky high. With bills now coming due, many energy companies are expected to file for bankruptcy or seek regulatory or legal remedies to put off payment.
"The polar vortex drove volatility in energy markets, and, as a market-maker and liquidity provider, we were positioned to help our clients manage their risks in that challenging environment," said a Goldman Sachs spokeswoman in an emailed statement.
Bank of America (NYSE:BAC) also stands to make hundreds of millions of dollars from trades related to Texas's energy market, the Financial Times reported Friday. That bank said any revenue will be offset by losses and reduced investments that resulted from business the bank has with other energy sources in Texas.
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Written By: Reuters
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