Gas prices plunge as flotilla of tankers heads for Europe

At least 15 tankers filled with natural gas are steaming across the Altantic to replenish depleted European supplies, sending prices tumbling for the third day.

The number revealing western European ports as their destinations is up from 10 on Wednesday, according to shipping data compiled by Bloomberg.

Another 11 ships carrying natural gas also appear to be headed for Europe but are yet to delcare their final destinations.

Prices, which hit new highs this week, are tumbling on hopes that increased gas supplies will ease the continent’s energy crunch. 

European gas futures fell below €100 per megawatt hour on Friday, while Dutch gas prices plunged by a fifth on Friday after slumping by 23pc on Thursday.

Supply concerns have grown more acute in recent days after flows from Russia fell, coupled with halted nuclear reactors in France and low wind power output in Germany.

Weather forecasts also turned milder for early January, pushing prices down. There has been speculation that some traders opted to close positions before the Christmas break. 

Nevertheless, Europe remains caught in its worst energy crisis in decades with gas prices, which have surged more than fivefold this year, pushing power costs to records and forcing industrial users  to curb output.

On Friday British Steel said soaring energy costs had forced it to stop taking new orders. 

The company said surging electricity prices were making it harder to compete with cheaper imports.

“We have temporarily paused the recruitment of new orders across a range of products as we assess the impact of escalating energy prices,” British Steel told Bloomberg. 

It also urged Ofgem, the energy regulator, to take action to curb “exorbitant” electricity costs.

Workers at the blast furnaces at British Steel's Scunthorpe plant

Fuel shipments from Russia dropped this week with no flows from the country through a major route to Germany for a fourth day on Friday. 

Russian exporter Gazprom PJSC has fewer requests from buyers, which is why it is not using the Yamal-Europe link for German supplies, according to Russian President Vladimir Putin. 

That means Europe has to rely on its already depleted storage sites, which are less than 58pc full, before buyers, who are probably waiting for prices to ease, top up purchases. Yet, industrial demand might be decreasing amid fresh waves of coronavirus restrictions. 

Russia expects gas prices to remain “at high levels next year”, deputy prime minister Alexander Novak said, adding that the nation has always been in favor of long-term gas contracts. 

Gazprom has been meeting its contractual supply obligations to Europe, yet for months has not offered additional batches on the spot market for delivery in late 2021 or early next year. 

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