UK GAS-Prices retreat amid weaker carbon market

March 11 (Reuters) - British wholesale gas prices eased on
Thursday as they took direction from European Union carbon
prices, which retreated from a new all-time high.

* The April contract was down 0.50 p at 44.50
p/therm
by 0954 GMT after gaining 6% to a one-month high on Wednesday.

* "Gas has been trading on carbon these past two days," a
gas
trader said, adding the markets were linked through the impact
of fuel switching.

* Gas-fired power production produces fewer emissions than
coal,
making it more competitive at time of high carbon prices.

* The benchmark Dec-21 EU carbon contract was down
0.40
euro at 41.14 euros per tonne.

* Earlier on Thursday it hit a fresh record high of 42.07
euros
per tonne.

* Carbon prices have been rising since the EU agreed last
year to
deepen toughen its climate targets, a move which will increase
demand for permits.

* The latest confirmation of two further arrivals of
Liquefied
natural gas (LNG) tankers to Britain also helped assuage some
bullish concerns for April, said Refinitiv gas analysts.

* In the Dutch gas market, the April price at the TTF hub
was down 0.17 euros at 17.50 euros per megawatt
hour.

* "We expect front-month and external fuels to override
day-ahead
sentiment and once more provide the majority of direction," said
Refinitiv's Wayne Bryan.

* The day-ahead contract was down 0.50 pence at
45
p/therm

* The British gas system was over-supplied by around 6.1
million
cubic metres (mcm), with demand forecast at 261.1 mcm/day and
flows at 267.2 mcm/day, National Grid data showed.

* Peak wind power generation was forecast at 15 gigawatts
(GW) for
Thursday and 14.8 GW on Friday, of total metered capacity of 18
GW, Elexon data showed.
(Reporting by Nora Buli in OSLO; editing by Nina Chestney)

National Grid