* Storage inventories, field outage props forward prices
* Lower heating demand drags on spot contracts
LONDON, May 17 (Reuters) - British spot gas prices slipped on Friday due to an initially oversupplied network and lower central heating demand, while later-dated contracts edged higher as some storage sites ran down.
The price of gas for Monday delivery rose 0.25 pence to 65.75 pence per therm as households used less gas for heating, also pushing gas for immediate delivery down a quarter of a penny to 66.25 pence.
Prices further forward rose as low stocks reduced supply flexibility from mid-range storage site Holford, a gas field in the Irish Sea suffered another outage and high prices pushed back European stock refills until next week, traders said.
Withdrawals from Holford storage fell to about 2 million cubic metres (mcm) from 10 mcm on Thursday owing to low inventories, National Grid (LSE: NG.L - news) data showed.
The Centrica-operated Morecambe South gasfield in the Irish Sea ceased output early this morning due to an unplanned outage, with no restart time announced as yet, the company said in a market note.
"Continental (Stuttgart: 879538 - news) storage injections have halved this week due to the high prices, which isn't bearish going forward," a trader from a European utility said, referring to the fact that there will be higher demand to inject into storage next week as prices ease.
High prices have boosted trading activity as European utilities prefer to sell the gas directly to end-users rather than store it underground for future consumption.
Power prices for baseload (24 hours) delivery on Monday were trading around 51.50 pounds ($77.12) per megawatt-hour (MWh), down by about a pound.
Although the system was oversupplied earlier, it became undersupplied by 2 mcm at 1042 BST, while demand was in line with seasonal norms at 219 mcm.
On the supply side, analysts at Thomson Reuters Point Carbon said that Norwegian gas field maintenance between May 21 and July 12 would lead to a capacity loss of 54 mcm per day.
Imports of overseas LNG are also lower than they were in April.
Britain's MetOffice said: "Temperatures are likely to remain on the cool side, with the risk of overnight ground frosts in northern rural areas, but there are signs of a few warmer and brighter days in the east and southeast of England later in the period (May 21-30)."
