LONDON: Prompt natural gas prices in Britain fell on Wednesday morning as supply outstripped weak demand while sinking oil prices pushed curve contracts lower.
Gas prices for within-day delivery were trading at 44.25 pence per therm at 0905 GMT, down 0.85 pence since their last settlement.
Prices for delivery on Thursday fell 0.70 pence to 44.55 pence per therm.
With supply flows at about 305.1 million cubic metres (mcm) and demand expected to be about 288.5 mcm, the system was 16.6 mcm oversupplied, National Grid data showed.
Traders said demand for gas for heating was weak due to warmer-than-usual temperatures in the country.
Britain's Met Office forecast temperatures could reach 9 degrees on Wednesday and go as high as 11 degrees on Thursday compared to average temperatures for January of around 7 degrees.
Further along the curve, gas for delivery in Q4 15 was 2.30 pence lower at 46.95 pence per therm and the Q1 16 contract was down 2.25 pence at 50.25 pence per therm. .
Traders said weak oil prices, which slipped to their lowest levels since May 2009 on Wednesday, had helped drag gas prices lower.
Forward gas contracts, due to a longstanding practice which fixes long-term gas prices to crude, are sensitive to swings in oil markets.
Front-month Brent crude oil prices fell below $50 a barrel on Wednesday as global business growth slowed to its weakest in a year, and analysts said a growing supply glut meant more falls were likely.
In the Netherlands, the day-ahead gas price at the TTF hub was 0.2 euros lower at 19 euros per megawatt-hour.
The benchmark European Union carbon price dipped 0.08 euros to 6.78 euros a tonne on ICE Futures Europe.
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