Oil, coal prices boosted by frigid weather

The arctic blast that’s turning the northern half of the U.S. into a giant icebox this week has been good news for oil and coal.

Plants are using the most fuel oil in three years to produce the electricity that’s powering heaters across New England. In the PJM market, which stretches from Illinois to Washington, D.C., coal has once again surged past natural gas to become the biggest fuel for power generation. Oil demand has also shot up.

It marks a rare, albeit temporary, reversal of a broader transformation taking place in America’s power mix: The U.S. shale boom has unleashed record volumes of cheap natural gas, turning that fuel into the country’s biggest source of power generation. But this week’s deep freeze triggered gas price spikes across the eastern U.S., and generators are taking advantage of the rally to burn cheaper oil and coal.

At one hub in New England, spot gas more than tripled earlier this week to over $35 per million BTU, data compiled by Bloomberg show. On Friday, gas futures on the New York Mercantile Exchange briefly traded above $3.

— Bloomberg News


Tax law likely to lower Goldman results

Goldman Sachs expects to take a $5 billion hit to profits for the fourth quarter and year because of the tax overhaul signed into law last week.

As a result, the New York bank will likely report a loss for the last quarter of 2017. But Goldman and other banks will be among the largest beneficiaries of the new tax code.

Goldman on Friday became one of the first companies to release details on how changes in the tax code will affect how money parked overseas is handled. The bank said two-thirds of the $5 billion is related to changes in repatriation taxes, when funds are returned from overseas.

The new tax overhaul imposes a discounted one-time levy on overseas money returned to the U.S. — 15.5 percent for earnings held in cash or other liquid assets and 8 percent for earnings held in harder-to-sell assets. Previously, companies had to pay a 35 percent corporate tax when they returned that money, so they left it parked overseas.

It has been expected that changes in the law would prompt many companies to return money to the U.S., potentially $2.5 trillion or more.

Goldman had been expected to post fourth-quarter net income of $2.07 billion, according to banking analysts polled by FactSet.

— Associated Press

Also in Business

AT&T said on Friday that all 50 U.S. states had decided to participate in the nationwide broadband network it is building for first responders as part of a $6.5 billion government contract. In March, the U.S. government awarded a contract to AT&T to build the network, years after a federal commission recommended setting up such a system following the 9/11 attacks. In addition to the states, the District, Puerto Rico and the U.S. Virgin Islands also opted to be part of the network.

SandRidge Energy, succumbing to a campaign led by activist investor Carl Icahn, gave up on its proposed purchase of rival oil and natural gas explorer Bonanza Creek Energy Inc. SandRidge announced the planned acquisition, initially valued at about $750 million, on Nov. 15. A week later, Icahn, who owns a 13.5 percent stake, blasted the deal as overpriced.

Bolstered by hits such as "Star Wars: The Last Jedi" and "Beauty and the Beast," the Walt Disney Company is the top grossing studio at the 2017 domestic box office with more than $2.2 billion in revenue and 21.2 percent of the market share. Warner Bros. placed second.

JetBlue Airways has little to show for its efforts to improve on-time performance. This year through October, the airline's on-time arrival rate of 70 percent trails the industry average of 79 percent, according to the U.S. Transportation Department. That puts the carrier on track for its worst showing since 2007.

A federal judge in San Francisco has refused to dismiss antitrust class action litigation accusing two South Korean ramen producers of conspiring to fix prices in the United States, clearing the way for a trial. U.S. District Judge William Orrick on Thursday rejected efforts by market leader Nongshim and Ottogi to dismiss claims brought by food retailers and distributors, and by consumers in 23 states and the District.

— From news services