LONDON, July 16 (Reuters) - British prompt gas prices slid on Monday morning as above-average
temperatures weighed on demand and Norway boosted exports towards winter levels, leading to UK oversupply.
The day-ahead gas contract lost 1.20 pence to 54.55 pence a therm as imports from Norway rose to about 80 million cubic metres a day (mcmd), akin to winter levels of demand, despite a forecast rise in temperatures to 23 degrees Celsius later in the week.
Liquefied natural gas (LNG) output from the South Hook terminal increased to 23 mcmd and added to oversupply, offset slightly by lower supplies from the Netherlands and a production halt at Centrica's South Morecambe gas field.
Weekend gas fell nearly two pence to 54.65 pence.
The month-ahead delivery contract shed half a penny to 54.35 pence on the back of bearish sentiment across the prompt market, traders said.
'Norway is flowing pretty much at winter levels of supply amid risk-averse trading,' a trader from a UK utility said.
'The market has proved to be pretty difficult to predict recently and there seems to be a lack of appetite for putting on big positions,' he added.
'Typically at this time of year prices become quite range-bound anyway,' he said.
The UK gas market was oversupplied by 18 mcmd at 1000 GMT, with demand pegged 25 percent below seasonal norms.
Analysts at Point Carbon said: 'Central heating demand for day-ahead is forecasted down and supplies have increased substantially as Norway is sending more gas to the UK, giving a clear bearish signal for the NBP.'
The increase in Norwegian supplies reflects the return from maintenance of the Oseberg oil and gas field, Point Carbon said.
Further forward, the benchmark winter 2012 gas contract shed half a penny to 63.35 pence.
In Britain's power markets, spot baseload power prices for next-day delivery traded at 23.10 pounds per megawatt hour (MWh), down 1 pound day on day.
Coal was again the leading power plant fuel in the UK, given its cheapness relative to gas. But gas-fired plants saw their share of the power mix rise regardless, climbing to 32 percent compared with 28.8 percent on Sunday. Coal accounted for nearly 40 percent of the UK's power generation.
The contribution from nuclear power fell sharply to 18 percent.
(Reporting by Oleg Vukmanovic; Editing by Anthony Barker)
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