LONDON: British wholesale prompt natural gas prices eased on Monday morning as milder weather and healthy supplies left the system oversupplied, opening the opportunity for storage supplies, analysts said.
Gas for delivery the next day was trading around 65.40 pence per therm at 0900 GMT on Monday, down 0.1 pence since Friday morning, and prices for within-day delivery were trading at 65.20 pence a therm, down 0.65 pence.
Britain's gas demand was expected to be at 255.6 million cubic metres (mcm) on Monday, some 7 percent below the seasonal norm, according to data from National Grid, and with flows seen at 266.2 mcm, the system was forecast to be 10.6 mcm oversupplied.
"The system opened long this morning. Day-ahead consumption is forecast 28 mcm/d down from our previous forecast, and LNG send outs are 47 mcm/d up from Friday's average of 36 mcm/d," analysts at Thomson Reuters Point Carbon said, adding that it was bearish for day-ahead gas prices, expecting a range of 64 to 65.8 pence per therm.
Traders said the oversupplied system opened the opportunity to inject gas into storage in preparation for a possible winter cold spell that would see a sharp rise in demand.
"We haven't had a real cold spell yet, but that is bound to change at some point so utilities are taking the opportunity of a long system to inject gas into storage so they can deliver in a short system when it gets really cold," one gas trader said.
Britain's gas storage sites were filled to an average of 95.88 percent at the beginning of this week, according to data from Gas Infrastructure Europe, up from 94.5 percent last week but still down from over 98 percent at the beginning of the month.
Energy weather experts WSI revised the winter weather forecast for Britain on Monday, saying that it expected colder conditions then previously forecast.
"WSI expects temperatures for the upcoming period (December-February) to average slightly lower than normal across the UK and Iberia (Spain and Portugal), with higher-than-normal temperatures expected across other regions, especially western Russia," the US energy weather experts said in their monthly outlook.
In power markets, Britain's over-the-counter day-ahead baseload power contract traded at 47.95 pounds per megawatt hour, up 25 pence since Friday.
Traders said that the rise was a result of EDF Energy's refuelling outage of its 620 megawatt Hartlepool 1 nuclear reactor, which began on Saturday, November 17.
"The nuclear outage pushed prices up although a mild weather outlook for much of this week reduced its impact somewhat," a power trader said.
The UK's MetOffice said that it expected conditions to be "breezy and mild everywhere," with maximum temperatures of 13 degrees Celsius for much of this week, up from below 10 degrees on Sunday.
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