* Warmer weather forecasts dent prompt demand
* El Nino to lift winter gas demand
LONDON, Sept 10 (Reuters) – Prompt natural gas prices edged down on Thursday morning despite an undersupplied system, due to warmer weather forecasts and expectations domestic supply could ramp up.
Gas for delivery on Friday was trading at 41.35 pence per therm by 0907 GMT, down 0.10 pence from its previous settlement.
The within-day contract fell 0.15 pence to 41.75 pence per therm.
Traders said warmer weather forecasts had curbed gas demand. Britain’s Met Office forecasts temperatures could reach a high of 21 degrees Celsius on Thursday and 22 degrees on Friday, compared with normal average temperatures for September of around 17 degrees.
Meanwhile gas supplies were also likely to increase over Thursday and Friday.
Gas flows through Britain’s Bacton Seal gas terminal were zero on Thursday morning but operator Total E&P said a slow ramp would begin on Thursday or early Friday.
An unplanned outage of offshore production affecting gas flows at the site started on Sept. 5.
With total supply flows at 152.2 million cubic metres (mcm) per day in Britain and demand expected at 164.6 mcm, the system was 11.9 mcm undersupplied, National Grid (LSE: NG.L – news) data showed.
Further out on the curve the Winter 15 contract was flat at 43.95 pence per therm.
Analysts at London-based Energy Aspects said cooler weather due to the El Nino weather phenomenon could lead to higher gas demand across Northern Europe in winter.
“At a minimum, this will lead to a 17 bcm (billion cubic metres) y/y increase in demand over winter 15-16 (Q4 15 and Q1 16),” the analysts said in a research note on Thursday.
However strong gas supplies from Russia and high deliveries of liquefied natural gas would keep a lid on prices, they added.
Energy Aspects forecasts average prices of 44.00 pence per therm in the fourth quarter of the year, down from 53.00 pence per therm during the same period last year.
In the Dutch TTF gas market, prices were also lower. Day-ahead TTF gas was down 0.05 euros at 19.35 euros per megawatt hour.
In Europe’s carbon market, benchmark EU Allowances (EUA) were up 0.02 euros at 8.30 euros per tonne. (Reporting by Susanna Twidale; Editing by Pravin Char)
