Recently, unprecedented winter storms have continued to impact the energy networks of Texas and many parts of the United States, and natural gas, hydropower and other energy sources have become "scarce products" in the market, and prices have risen. At a time when many Americans are worried about "sky-high energy bills", an Australian bank is making a lot of money in this extreme cold wave.
Screenshot of Bloomberg's report
According to Bloomberg reported on the 22nd, the cold wave that swept the United States brought a "windfall" of up to 270 million Australian dollars (about 1.38 billion yuan) to the Macquarie Group, an Australian bank.
On the 22nd, the Sydney-based bank raised its expected profit by 5% to 10%, citing rising demand in the US natural gas and electricity market. That means the company's net profit for the financial year ended March 31 was about $2.87 billion to $3 billion, up from $2.73 billion in the year-ago quarter. Just two weeks ago, the bank predicted that earnings for the fiscal year would be "slightly" lower than last year.
According to reports, Macquarie is the second largest physical natural gas seller in North America, after British Petroleum (BP). Macquarie typically transports natural gas between different parts of the United States based on the urgent needs of its customers. In 2017, the bank acquired Cargill Inc.'s U.S. power and gas business.
The Wall Street Journal quoted people familiar with the matter on the 22nd as saying that Macquarie has been developing business in the United States for more than ten years, involving 80% of the natural gas pipelines in the United States, and has a team in Houston, Texas. By leasing natural gas pipelines and power grids across the United States, Macquarie can profit from areas where U.S. energy prices are high and consumer demand is intensifying.
This cold wave of attack on the United States has undoubtedly become a "main battlefield" for Macquarie to make money. Extreme weather has prevented energy infrastructure in many parts of the United States from functioning properly, including power grids, natural gas wells, oil wells, refineries, and more. This has also led to a surge in demand for energy markets, with electricity prices and natural gas prices soaring.
Texan residents light candles in their dark homes. Their home has been without electricity since the statewide blackout began on Feb. 14. The picture is from the surging image
Bloomberg said U.S. brick-and-mortar natural gas prices typically fall below the $3 million-per-million-inch thermal unit (BTU), but the price surged to $1,250 in parts of the U.S. last week, up more than 300-fold. In the hardest-hit State of Texas, spot electricity prices have also risen more than a hundredfold in extremely cold weather.
A person familiar with the matter told Bloomberg that last week, Macquarie achieved excess profits from its major customers. These customers sought to buy natural gas and electricity during the Texas energy crisis, and Macquarie was responsible for delivering those energy to customers.
Last year, Macquarie also invested in Griddy, a Texas power provider. Recently, Glady issued a number of "sky-high electricity bills" to their customers, including a Texas woman who publicly posted a $12,000 electricity bill (about 77,000 yuan). She revealed to the US media that she signed a monthly payment agreement with Glady, the package is very cheap in normal times, in previous years, the monthly electricity bill in the spring was only about 50 US dollars, but the price increase was obvious under special circumstances.
On Feb. 22, Macquarie shares closed up 3.5 per cent to A$147.15 on the day, a near-one-year high, due to the positive upward revision of earnings expectations. Reuters also commented that the expected huge profit of up to $270 million changed the bank's outlook for the full year.
Macquarie shares are currently provisionally trading at $148.84
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