LONDON: British prompt gas prices eased slightly on Monday morning as warm weather kept demand far below the seasonal norm.
Gas prices for delivery within the day were trading around 64.50 pence a therm at 0800 GMT on Monday, 0.70 pence lower than on Friday morning, and prices for delivery the next day were also trading at 64.50 pence.
The lower prices were a result of demand standing around 27 percent below the seasonal norm at 161.3 million cubic metres (mcm), according to National Grid.
Britain's Met Office said that the warm weather, which has reduced household energy demand, is expected to continue to dominate the weather this week.
"Much of the UK will stay fine and warm with plenty of sunny spells," the Met Office said, adding that temperatures could rise above 30 degrees Celsius during most days of this week.
Despite weak demand the system was not oversupplied, with flows standing around 162 mcm, and an outage at SSE's Aldbrough gas storage site took further supplies.
"Lower LNG supplies from South Hook and Aldbrough's withdrawal capacity reduced are bullish factors for the day-ahead contract," analysts at Thomson Reuters Point Carbon said, but added that lower consumption was a bearish price factor.
Further out on the price curve, prices for delivery next winter remained firm, trading around 72.35 pence a therm in the morning, remaining unusually high.
Traders said that the high forward prices resulted from widespread Norwegian maintenance clashing with behind-schedule storage refilling in Britain.
"Norway has had a lot of capacity under maintenance this year, and that collides with utilities here being behind schedule in refilling their gas storage sites following the long and cold winter this year," one utility trader said.
Britain's gas storage sites are filled to an average level of 62.3 percent, according to Gas Infrastructure Europe, compared with over 80 percent at this time last year.
On a technical basis, the contract remained above all its 50, 100 and 200 exponential daily moving average (DMA) levels of 71.63, 70.13 and 67.99 pence a therm respectively.
The contract has been above these DMA levels since late January almost without interruption, the longest phase since the beginning of the financial crisis in autumn 2008.
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