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UK GAS-Prices edge down on ample supply after previous bounce

British wholesale gas contracts edged down on Thursday in an oversupplied market but the falls were cushioned by an outage at a Norwegian field and the prices were still high for this time of the year.

* Day-ahead gas slid 0.2 pence to 58.30 pence per therm (p/therm) while gas for immediate delivery fell by the same amount to 58.40 p/therm by 0815 GMT.

* The gas system was oversupplied by 9 million cubic metres (mcm) with demand forecast at 176.4 mcm and supplies seen at 185.4 mcm, National Grid data showed.

* Unusually warm weather across the country continued, keeping consumption levels low – household demand is seen remaining stable at 55 mcm on Thursday and 54 mcm on Friday.

* Average daily temperatures in Britain are seen at about 19 degrees Celsius on Thursday but are expected to rise to 21 C next week, Thomson Reuters Eikon data showed.

* But prompt and forward contracts were supported by several factors and this week were at their highest levels seasonally in five years.

* The bullish factors include an outage in Norway, low wind power generation and dwindling contributions from liquefied natural gas (LNG) terminals.

* A shutdown at Norway’s Gullfaks gas field continued on Thursday and the system operator there extended the duration of the outage to one to two days from 12 to 24 hours.

* This has reduced supplies to Britain, expected to be down by 3 million cubic metres (mcm) to 74 mcm from 77 mcm on Wednesday.

* The shutdown of the Nord Stream gas pipeline from Russia to Germany for two weeks also boosted demand for Norwegian gas on the continent, which may tighten supplies to Britain during the period.

* With the temperate weather, wind generation gas been low with peak generation expected at 1.8 gigawatts (GW) on Thursday and 1.7 GW on Friday compared with a total metred capacity of 12 GW.

* Forward monthly contracts rose with August gas up 0.25 pence at 58.00 p/therm and September up 0.24 pence at 58.79 p/therm

* In the Dutch gas market, the day-ahead price at the TTF hub edged up by 0.08 euro to 22.28 euros per megawatt-hour

* The benchmark Dec-18 EU carbon contract rose by 0.16 euros to 16.57 euros a tonne.
Source: Reuters (Reporting by Sabina Zawadzki Editing by Mark Heinrich)

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