UK GAS-Mild weather forecast triggers broad price decline

LONDON, Dec (Shanghai: 600875.SS - news) 22 (Reuters) - British wholesale gas contracts fell on Friday as mild weather forecasts, improved supply outlooks and strong wind power output weighed on prices. * Within-day gas fell by 1.50 pence to 56.50 pence per therm at 1028 GMT. * Day-ahead gas was down 0.85 pence at 55.90 pence per therm. * Losses on day-ahead were less severe due to a colder weather forecast for Monday when temperatures should drop by up to 5 degrees Celsius to 4 degrees, which is expected to lift heating demand. * However, the revised 45-day weather forecast overnight indicated milder than expected temperatures, weighing on spot and curve gas contracts across the board, traders said. * The Forties gas pipeline system, which carries a third of the UK's offshore gas production, should be repaired around Christmas, operator Ineos said. * The pipeline's restart date comes earlier than the market initially expected, traders said. * "The EC-45 day temperature forecast was revised higher overnight, I think that is the main bearish factor," an analyst at a European utility said. * "An interesting fact is that storage sites are already switched to net injections, usually we see this kind of switch between Christmas and New Year's Eve (Shenzhen: 300014.SZ - news) (but) it's a bit earlier this year," he added. * The Christmas period is traditionally characterised by low gas demand and electricity consumption, an additional reason for lower prices. * A trader said mild temperatures were a decisive factor behind UK gas prices weakening, adding that prices were coming off following a spell of sustained gains through the first part of December. * January gas fell by 1.45 pence to 57.35 pence per therm. * There are also forecasta for strong wind power output over the coming few days, which usually means gas-for-power demand is lower. * Britain's gas market was oversupplied by 6.4 million cubic metres/day with demand pegged at 282.3 mcm/day and supply at 288.7 mcm/day, National Grid (LSE: NG.L - news) data. * Flows from Norway to Britain steadied at 134 mcm/day. * In the Dutch gas market, the day-ahead gas price at the TTF hub fell by 0.45 euro to 19.75 euros per megawatt hour (MWh). * The benchmark Dec-18 EU carbon contract was down up 0.05 euro to 8.07 euros a tonne. * Thomson Reuters (Dusseldorf: TOC.DU - news) analyst view: http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageid=united-kingdom-gas (Reporting by Oleg Vukmanovic; editing by Nina Chestney)