LONDON: British wholesale gas prices dropped on Monday morning on a combination of lower demand, reduced exports from Britain to the continent and a recovery in flows into Europe from Russia via the Yamal-Europe pipeline.

The day-ahead contract fell by 1.05 pence to 8.00 p/therm by 0834 GMT.

The within-day contract dropped by 0.95 p to 7.75 p/therm.

UK gas system was 14.5 mcm oversupplied, with demand forecast at 160.3 mcm and supply at 174.8 mcm, National Grid data showed.

The oversupply was driven by lower-than-expected local distribution zone (LDZ) consumption and gas-for-power demand, Refinitiv data showed.

It was also driven by a drop in exports of gas from Britain to continental Europe.

LDZ demand was expected at 61 mcm on Monday, 6 mcm lower than forecast earlier.

Gas-for-power demand was forecast at 41 mcm on Monday, a drop of 16 mcm from an earlier prediction.

On Tuesday, is expected to rise to 47 mcm due to lower wind generation.

UK exports via the Interconnector pipeline to Belgium fell to 29 mcm, a 10 mcm drop compared to Friday, as less capacity on the pipeline is booked for June.

Flows from Russia via the Yamal-Europe pipeline through the Mallnow compressor station were at 64 mcm after being inactive for the second jalf of May as a long-term contract expired on 17 May.

Curve prices also dropped.

The July contract was down 1.13 pence at 8.70 p/therm.

The day-ahead gas price at the Dutch TTF hub was down by 0.30 euro at 3.20 euros per megawatt hour.