December 5, 2016 / 10:22 AM / 3 years ago

UK GAS-Prices fall on milder weather outlook

* Temperatures forecast to rise this week

* Monday forecast as coldest day

* More LNG supply scheduled this week

Dec 5 (Reuters) - British wholesale gas prices fell on Monday morning on expectations of weaker demand as temperatures above the seasonal norm are forecast for the rest of this week.

The day-ahead contract fell by 1.25 pence to 46.00 pence/therm by 1013 GMT.

Peak daily temperatures in the south of the country are forecast to rise by 3 degrees Celsius to 11 degrees on Tuesday due to south-westerly winds bringing milder weather, and then to 13 degrees by Friday, Britain’s Met Office said.

“Gas demand for heating is dropping due to temperatures rising up to 6 degrees above normal this week,” said Cecile Langevin, analyst at Thomson Reuters.

Home heating accounts for 40 percent of Britain’s gas use, meaning changes in temperatures can have a big impact on demand.

Peak wind generation is also expected to more than double to 4.8 GW on Tuesday, National Grid data showed, which should reduce gas-for-power demand from gas-fired power plants.

Liquefied natural gas deliveries are also set to double by the end of the week as a new cargo was scheduled to arrive to South Hook terminal on Wednesday.

However, within-day gas bucked the trend, inching up by 0.10 pence to 47.10 pence per therm due to an uptick in demand on Monday which is forecast to be the coldest day this week.

In Britain’s power market, the UK baseload day-ahead price fell by more than 25 percent to 52.50 pounds per megawatt-hour (MWh).

Oil prices fell by 1 percent on Monday as a higher U.S. rig count unsettled markets.

In the Netherlands, the day-ahead gas price at the TTF hub edged down by 0.05 euro to 17.55 euros/MWh.

In the European carbon market, the benchmark Dec. 2016 contract eased by 0.11 euro to 4.19 euros a tonne. (Reporting by Nerijus Adomaitis; editing by Nina Chestney)

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