British wholesale gas prices fell due to a heavily oversupplied system amid strong gas flows from Norway and low demand for heating and power.

Gas for immediate delivery was down 2.00 pence at 41.75 p/therm by 1020 GMT.

The weekend contract fell 1.95 pence to 41.85 p/therm, while the day-ahead contract had yet to trade.

The UK gas system was oversupplied by 34.3 million cubic metres on Friday, with demand forecast at around 232 mcm, and supply at 266.3 mcm, National Grid data showed.

The oversupply stemmed from lower demand for heating and power generation amid mild weather and strong wind, as well as higher flows of Norwegian gas, analysts at Refinitiv said.

Peak wind generation is forecast at 14.5 GW on Friday, out of a total metered capacity of around 18 GW, while usable output should drop to 10.9 GW on Monday, Elexon data shows.

However, the weather would turn noticeably colder from Monday, Refinitiv said.

Refinitiv revised demand for power 8 mcm higher to 44 mcm/day on Monday, while local distribution zone demand, which predominantly reflects heating, was up 33 mcm to 201 mcm/day.

Next week should see imports via the BBL pipeline from continental Europe of 10 mcm/d and storage withdrawals of 6 mcm/d, Refinitiv analysts said.

The UK contract for January gas deliveries dipped 0.05 pence to 45.70 p/therm.

The Dutch TTF January contract slipped 0.43 euro to 15.82 euros per megawatt hour, after trading as high as 17.33 euros per megawatt hour earlier this week.

Prices for the first quarter next year had surged to unsustainably high levels and should fall back as Northeast Asian demand for liquefied natural gas wane in the new year and as gas demand from the power sector would be muted, analysts at Energy Aspects said in a note.

The benchmark Dec-21 EU carbon contract dipped 0.31 euros to 31.65 euros per tonne.