October 17, 2016 / 9:32 AM / 3 years ago

UK GAS-Instant delivery price falls on high imports, oversupply

* UK gas market 27 mcm oversupplied

* Day-ahead contract higher on cooler weather

LONDON, Oct 17 (Reuters) - British gas prices for within-day delivery fell on Monday morning, as strong imports from the Netherlands and Norway led to an oversupplied system.

Gas for within-day delivery fell by 1.20 pence, to 41.65 pence per therm by 0902 GMT.

Britain’s gas system was oversupplied by 27 million cubic metres (mcm) per day, with demand forecast at 214 mcm and supply at 241 mcm, National Grid data showed.

Imports from the Netherlands through the BBL pipeline were around 16 mcm, up from 6 mcm on Friday.

Imports from Norway, through the Langeled pipeline were around full capacity at 70 mcm.

Traders said oversupply in the market had pushed the within-day price lower, but said the price for day-ahead delivery was buoyed by expectations of high demand for gas due to cooler weather forecasts.

The day-ahead contract rose 0.3 p to 42.55 p/therm.

Britain’s Met Office forecast temperatures would reach a high of around 17 degrees Celsius in the south of the country, with the forecast high dropping to around 13 degrees Celsius on Tuesday.

“During the next few days temperatures should remain well below their seasonal average both in continental Europe and in the UK,” analysts at Italy’s Banca IMI said in a commodities research note.

Further out on the curve gas prices edged higher, with the Q1 2017 contract up 0.42 p to 48.20 p/therm.

In the Netherlands, the day-ahead gas price at the TTF hub rose by 0.35 euro to 15.85 euros per MWh.

In the European carbon market, the benchmark Dec. 16 contract edged up 0.05 euro to 5.86 euros a tonne. (Reporting by Susanna Twidale; Editing by Adrian Croft)

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