Prices mixed on lower Russian flows, outages, demand outlook

LONDON, March 18 (Reuters) - British and Dutch gas prices were mixed on Friday morning amid slightly lower Russian flows through two pipelines, expectations of Norwegian outages and a mixed outlook for demand next week.

The British gas price for immediate delivery was 4.50 pence higher at 248.00 pence per therm by 1008 GMT, while the working days next week price was down 4.00 pence at 248.00 p/therm.

In the Dutch gas market, April contract was 0.80 euro higher at 105.80 euros per megawatt hour (MWh) and the weekend price was 0.90 euro lower at 103.60 euros/MWh.

"It is a bit of a dull picture this morning with no clear direction," a gas trader said.

Russian gas deliveries to Europe via the Nord Stream 1 pipeline declined on Friday in line with nominations, while reverse flows on the Yamal-Europe pipeline eased and nominations for pipeline flows via Ukraine increased.

Consultancy Wood Mackenzie said if Russian flows continue uninterrupted, Europe, including Britain, will end this winter with 27 billion cubic metres (bcm) of gas in storage – a level within the five-year range.

If Russian flows stop this month, gas in storage would be enough for the rest of this winter and summer, but Europe risks entering next winter with only around 10% of gas in storage by the end of October unless there are compensation measures.

"Europe risks curtailing at least 11 bcm, or 20%, of industrial gas demand in the winter, with the risk firmly on the upside as compensation measures will inevitably be lower," said Kateryna Filippenko, principal analyst at Wood Mackenzie’s Europe gas and LNG team.

Meanwhile, Norwegian exports were largely stable on Friday but several maintenance outages are planned this month. Maintenance at the FLAGS/SEGAL system also began today with some Norwegian volumes re-routed to north-west Europe.

Local distribution zone consumption, mainly used for heating, in Britain and north-west Europe is expected to weaken over the weekend and next week, with above average temperatures forecast, Refinitiv Eikon data showed.

But wind power generation is expected to fall to below the seasonal norm, which could raise demand for gas from power plants.

In the European carbon market, the benchmark contract inched down by 0.12 euro to 79.77 euros a tonne.