LONDON: British prompt gas prices fell on Thursday as mild weather kept demand in check, while higher inflows from the Netherlands and North Sea led to an oversupplied market.
Less gas also was injected into underground storage sites, cutting down on demand and further boosting spot supplies.
Gas prices for Friday delivery fell 0.15 pence to 66 pence per therm at 0900 GMT, with Britain's gas network oversupplied by 12 million cubic metres/day (mcm).
Gas for instant delivery traded at 65.09 pence ($1.10), down 0.60 pence on the day.
"The prompt has marginally softened this morning on the back of a long (oversupplied) system, whereas near curve contracts have ticked slightly up," a trader said.
Price gains on gas for delivery in the winter months of November, January and February reflect expectations of rising demand due to cold weather.
The November gas contract rose 0.15 pence to 69.45 pence, while January climbed by the same amount to 72.90 pence and February traded at 73.05 pence, up a quarter penny on the day.
"Contracts further out are generally in line with yesterday's close," the trader added, referring to seasonal contracts in 2014 and beyond.
The benchmark summer 2014 gas contract edged down 0.03 pence to 63.85 pence, while gas for delivery next winter traded slightly higher, up 0.05 pence at 69.60 pence.
Imports from the Netherlands jumped to highs of 27 mcm early in the day from zero late Wednesday night, but supplies then eased back to just shy of 20 mcm by 0900 GMT, real-time flow data from National Grid showed.
Domestic output also rose thanks chiefly to higher inflows into Shell's St. Fergus receiving terminal in Scotland.
"Flows from the UK Continental Shelf (UKCS) are at 99 mcm this morning, up from yesterday's average, on higher flows into St. Fergus Shell, which are currently 12 mcm/d," analysts at Thomson Reuters Point Carbon said.
"Nominations from the UKCS suggest today flows at 109 mcm/d, and nominations for St. Fergus Shell are 19 mcm/d, around the level before the Segal pipeline went into the maintenance," they said.
The overall rise in flows was slightly offset by a drop in deliveries from main supplier Norway.
Gas deliveries through the Langeled pipeline to Britain eased to around 33 mcm from highs of 63 mcm overnight.
A cut in Norwegian exports of 30 mcm is expected from Nov. 1 due to maintenance at the Kaarstoe gas processing plant, gas grid operator Gassco said this morning.
Power prices for baseload (24 hours) delivery on Friday sank by 3.20 pounds per megawatt-hour (MWh) to 46 pounds a MWh.
Thursday gas demand was estimated at 189.5 mcm.
Around 12.3 mcm of gas was expected to be injected into Britain's storage sites during the day, substantially lower than the previous day's rate of 35 mcm.
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