Nearly 5,000 miles from New York, in postcard-perfect Hawaii, a new model for Wall Street’s commodity business is taking shape. Goldman Sachs Group Inc . GS -2.66 % earlier this year struck a deal to provide operating cash and credit guarantees to Oahu’s Hawaii Independent Energy, the state’s largest supplier of jet and ship fuel and a marketer of gasoline and diesel to retail outlets across Hawaii’s islands. Known as inventory financing, the arrangement, while profitable for Goldman, typifies its new lower-risk, lower-return approach for commodities. Before the financial crisis, the firm’s traders used the bank’s capital to make big wagers on the direction of commodity prices. Now, tougher capital rules, along with the Dodd-Frank financial overhaul law, have chilled that trading business, leaving banks to pursue less-profitable lines of work. “We’re replacing market risk” with the credit risk of making loans, said Gregory Agran, a global co-head of […]