While the energy crisis in Europe is worsening by the day, US LNG tankers reportedly destined for China have been diverted to head towards Britain in a move that is critical to tempering even more extreme prices and demand destruction in Europe.
James Huckstepp, managing analyst at S&P Global Platts pointed that cargoes previously destined for Asia, particularly those originating in the US, are now diverting to the UK given the shorter journey between the US and Europe than that to Asia.
According to figures reported by Bloomberg, the number of US tankers with American liquefied natural gas heading for ports in Europe reportedly increased by a third last weekend – 20 cargo ships were heading for Europe while another 14 were sailing in the general direction of Europe while awaiting final orders.
Most of the gas for Britain is coming via the pipelines running through the North Sea to Norway and continental Europe, 20% of the gas arrives by ship on the global market.
The latest diverting and arrival of cargo ships attracted from other parts of the world are lowering the prices of the gas with the TTF Dutch futures contract for delivery in January dropping 1.5% on Tuesday to $1,200 per thousand cubic meters.
Last week, the spot price for gas reached over $2,000 per thousand cubic meters.
The reluctance by EU countries to buy more gas from Russia amid the growing political rift over Ukraine is only exacerbating the worst energy crises in recent European history which is attributed to a wide range of factors, including low levels of gas storage and increased consumption due to the winter season.
Be the first to comment