December 2, 2016 / 10:02 AM / 2 years ago

REFILE-UK GAS-Prices down on healthy supply, pickup in temperatures

(Adds line on oil)

* Market slightly oversupplied by 4 mcm

* Heating demand down due to slight pickup in temperatures

By Nina Chestney

LONDON, Dec 2 (Reuters) - British wholesale gas prices fell on Friday morning due to healthy supply and also less demand for gas for heating due to a slight increase in temperatures forecast for next week.

The day-ahead contract fell by 1.00 pence to 48.65 pence/therm at 0947 GMT. Gas for within-day delivery was 1.05 pence lower at 48.50 pence per therm.

Demand was forecast at almost 335 million cubic metres (mcm). Flows were forecast at 339 mcm/day, leaving the system 4 mcm oversupplied, National Grid data showed.

Heating demand has decreased as daily average temperatures are expected to be up to 4 degrees C higher into next week.

However, demand for gas from power stations has picked up due to lower nuclear output as Dungeness B-22 went offline for planned maintenance.

Supplies are healthy. Flows through the Langeled pipeline from Norway are at 75 mcm, 4 mcm higher than average flows on Thursday.

Imports from continental Europe through InterconnectorUK should reach 48 mcm, 2 mcm higher than on Thursday.

Flows from Norway through the Vesterled pipeline were at 20 mcm/day, from 30 mcm on Thursday. Maintenance at the Heimdal gas field in Norway has been extended by one day to Saturday.

UK Continental Shelf supplies were at 147 mcm, 10 mcm below average flows on Thursday.

Only one liquefied natural gas (LNG) tanker is scheduled to arrive in Britain in the coming week.

“South Hook activity should remain minimal in December as global LNG demand from China might be higher than expected due to the government foreseeing a very cold winter,” said Cecile Langevin, analyst at Thomson Reuters.

“Qatari exports have also been lower than usual over the past few weeks,” she added.

Centrica’s Rough gas storage site should resume withdrawal operations from Dec. 9 after an outage.

However, large withdrawals are not expected in December as the facility should keep the low volumes in storage for withdrawal in January and February which are typically the coldest months of the winter, Langevin said.

Oil prices also dipped on Friday due to concerns about whether producers would implement an OPEC-Russia deal to curb production.

In the Netherlands, the day-ahead gas price at the TTF hub was 0.28 euro lower at 17.80 euros per MWh.

In the European carbon market, the benchmark Dec. 16 contract dipped by 0.09 euro to 4.37 euros a tonne. (Reporting by Nina Chestney)

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