December 13, 2016 / 9:35 AM / 3 years ago

UK GAS-Prices decline on oversupply

* Within-day gas down 0.70 pence at 44.25 p/therm

* System oversupplied by 23 mcm/day

LONDON, Dec 13 (Reuters) - British wholesale gas prices declined on Tuesday morning in response to an oversupplied system.

Gas for instant delivery was down 0.70 pence at 44.25 pence per therm at 0929 GMT, while the day-ahead contract edged down 0.20 pence to 44.20 p/therm.

Britain’s gas system was oversupplied by 23 million cubic metres (mcm), with demand forecast at 290 mcm and flows at 313 mcm/day, National Grid data shows.

“The market is quite long which has put a little pressure on the prompt,” a UK gas trader said.

UK Continental Shelf flows are at 164 mcm/d, compared to 156 mcm on Monday. Flows from Norway through the Vesterled pipeline have ramped up and are close to normal, after an outage at the Heimdal gas field ended on Sunday.

“We should expect to see around 30 mcm/d or even slightly more over the next days,” said analysts at Thomson Reuters.

Temperatures are forecast to fall by 4-5 degrees Celsius by the weekend, which will increase demand for gas for heating.

Further out on the curve gas prices rose, the Winter 17 contract was up 1.30 pence at 46.60 p/therm.

Oil prices were stable, supported by strong demand in Asia and a supply cut by Abu Dhabi.

In the Netherlands, the day-ahead gas price at the TTF hub inched up by 0.05 euro to 17.25 euros per MWh.

In the European carbon market, the benchmark Dec. 16 contract was down 0.16 euro at 4.71 euros a tonne. (Reporting by Nina Chestney)

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