• 5 minutes Rage Without Proof: Maduro Accuses U.S. Official Of Plotting Venezuela Invasion
  • 11 minutes IEA Sees Global Oil Supply Tightening More Quickly In 2019
  • 14 minutes Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 3 mins Alberta govt to construct another WCS processing refinery
  • 7 hours What Can Bring Oil Down to $20?
  • 1 hour U.S. Senate Advances Resolution To End Military Support For Saudis In Yemen
  • 7 hours Let's Just Block the Sun, Shall We?
  • 46 mins OPEC Cuts Deep to Save Cartel
  • 7 hours Venezuela continues to sink in misery
  • 5 hours $867 billion farm bill passed
  • 1 day Sleeping Hydrocarbon Giant
  • 1 day Sane Take on the Russia-Ukraine Case
  • 9 hours Contradictory: Euro Zone Takes Step To Deeper Integration, Key Issues Unresolved
  • 3 hours Global Economy-Bad Days Are coming
  • 4 hours Regular Gas dropped to $2.21 per gallon today
  • 9 hours WTO So Set Up Panels To Rule On U.S. Tariff Disputes
Will Self-Driving Cars Ever Be Safe Enough?

Will Self-Driving Cars Ever Be Safe Enough?

Collisions involving self-driving cars are…

Iran Widens Discount For Crude To Asia

Iran Widens Discount For Crude To Asia

Iran has deepened the discount…

Goldman Lost $100M On Marcellus Natural Gas Bet

rover pipeline

When construction on a key pipeline to transport Marcellus shale natural gas was delayed, Goldman Sachs lost more than US$100 million on a bet that Marcellus gas prices in the Marcellus shale would rise as takeaway pipeline capacity increased, The Wall Street Journal reports, citing people familiar with the trade.

In the second quarter, Goldman Sachs reported net revenues in the Fixed Income, Currency and Commodities Client Execution division plunging by 40 percent on the year to US$1.16 billion, “due to significantly lower net revenues in interest rate products, commodities, credit products and currencies, partially offset by higher net revenues in mortgages.”

According to The Journal’s sources familiar with Goldman’s wrong-way bet, the investment bank bet on the timely completion of pipelines designed to carry gas out of the Marcellus shale in Ohio and Pennsylvania. Goldman had placed bets that the natural gas prices in the Marcellus would rise relative to the Henry Hub national benchmark.

However, the US$4.2-billion Rover natural gas pipeline currently under construction started facing possible delays and mounting environmental scrutiny in the second quarter of 2017.

Rover, developed by Energy Transfer Partners, faces hurdles along its construction path, as several states have ordered additional environmental scrutiny, while some have ordered works be stopped in certain areas.

This has caused the Marcellus natural gas prices to drop—against Goldman’s bet for a rise—with the Marcellus shale prices quadrupled their discount to Henry Hub prices in the second quarter.

Related: Forget Oil Prices, Oil Majors Are A Buy

Last month, West Virginia environmental regulators ordered the Rover project to cease and desist some land development activities in the state over violations of state environmental regulations, until it fully complies with all rules.

Ohio has asked for higher penalties over the spill of drilling mud into a wetland in Stark County in April. Ohio and Michigan residents are asking the Army Corps of Engineers to revoke a permit for the pipeline.

The U.S. Federal Energy Regulatory Commission (FERC) said in a notice last month that “Staff has preliminarily determined that, between February 2015 and September 2016, Rover did not fully and forthrightly disclose all relevant information to the Commission.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News