Day-ahead wholesale British gas prices fell on Thursday morning, as forecasts for milder temperatures and higher wind power output curbed demand. The day-ahead contract fell by 1.33 pence to 52.80 pence/therm by 0955 GMT.
Traders said the fall was due to a rise in temperatures towards the end of the week and an increase in expected output from the country's wind farms which had cut demand for gas.
Britain's Met Office said many parts of the country would experience temperatures below zero degrees Celsius on Thursday but they would rise on Friday, with double-digit temperatures in some regions by the weekend. Home heating accounts for 40 percent of Britain's gas use, meaning temperatures can have a big impact on demand.
Peak wind generation was forecast to reach 6.1 gigawatts (GW) on Friday from 5.6 GW on Thursday, National Grid data showed. However, the within-day gas contract edged up by 0.1 pence to 53.25 pence per therm. Traders said even though the system was oversupplied on Thursday, cold temperatures had buoyed prices. Britain's gas system was oversupplied by 12.3 million cubic metres (mcm) per day, with demand forecast at 358.8 mcm and supply at 371.1 mcm, the data showed.