British gas prices edged lower on Friday as the market was oversupplied at the start of trading, while demand levels slipped below seasonal norms on milder weather and weak crude prices weighed on long-term contracts.
Gas for within-day delivery fell 1.65 pence to 67.20 pence per therm, while day-ahead gas traded at 68.15 pence, down 0.25 pence on Thursday’s closing price.
“We’ve been firm for a while now, it’s the first time we’ve seen the NBP open long in a few days so that’s triggered some selling,” said one trader at a utility.
The gas market was around 34 million cubic metres per day (mcm/d) oversupplied with help from steady Norwegian imports and a rise in gas received from Belgium, National Grid (LSE: NG.L – news) data showed.
At the same time demand levels were pegged at 5 percent below seasonal averages, adding to bearish pressure on short-term gas prices that are mainly driven by fluctuations in consumption.
Traders said a return to colder weather was expected next week, which may temporarily give another boost to the short-term market, but temperature forecasts for March already showed a milder start to the new month.