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UK GAS-Most prices edge lower on expectation of milder cold spell

Most British wholesale gas prices edged lower on Thursday morning as a cold spell coming to the country on Friday is expected to be shorter and warmer than predicted earlier.

* The within-day contract dropped 0.45 pence to 41.25 p per therm by 0940 GMT.

* The December contract dipped 0.55 p to 41.65 p per therm.

* The day-ahead contract rose 0.45 p to 41.70 p per therm.

* Britain’s gas system was 6.2 million cubic metres (mcm) undersupplied, with demand forecast at 284.8 mcm and supply at 278.6, National Grid data showed.

* Temperatures on Friday are forecast to drop below the season’s norm, driving heating demand to around 216 mcm from 188 mcm on Thursday, Refinitiv data showed.

* Gas-for-power demand is also expected to rise on Friday due to cold weather and low wind generation.

* Wind production is expected to drop to 5.6 Gigawatts (GW) on Friday from almost 10 GW on Thursday, Elexon data showed.

* However, the cold spell is expected to be shorter and less cold than predicted earlier, which has reflected in bearish prices for most of the contracts on Thursday.

* Temperatures are forecast to rise above the season’s norm from Wednesday, with residential consumption revised down for the weekend and next week, Refinitiv analysts said in a morning report.

* On the supply side, flows from Norway edged up by 5 mcm to 99 mcm on Thursday, Gassco data showed.

* Flows from UK Continental Shelf stepped up by 3 mcm to 144 mcm/per day.

* Liquefied natural gas (LNG) sendout is expected to be 2 mcm lower than on Wednesday.

* However, an influx of LNG cargo arrivals in Britain continues, with two more tankers carrying cargoes from the United States signalling Britain on Thursday.

* Day-ahead gas at the Dutch TTF hub edged down 0.02 euro to 15.93 euros per megawatt hour (MWh), the December contract was 0.27 euro down to 15.88 euros/MWh.

* The benchmark Dec-19 EU carbon contract slipped 0.11 euro to 25.00 euros per tonne.
Source: Reuters (Reporting by Ekaterina Kravtsova; Editing by Shounak Dasgupta)

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