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UK GAS-Prices fall as domestic gas production rises

* Day-ahead gas price 0.60 pence lower at 34.50 p/therm

* Rising domestic UK output helps keep system long

June 8 (Reuters) - British wholesale gas prices fell on Wednesday on the back of an oversupplied transmission network as domestic gas production increased.

Gas for day-ahead delivery was 0.25 pence lower at 34.85 pence per therm at 0940 GMT from the previous settlement, while gas for immediate delivery was down 0.40 pence at 34.60 pence per therm.

Demand is forecast at around 175.4 million cubic metres (mcm) and supplies at 183.4 mcm/day, leaving the system oversupplied by 8 mcm, according to National Grid (LSE: NG.L - news) data.

Average temperatures in Britain are forecast to be higher than normal until June 19.

"Prices across the prompt and into the near curve have opened the session lower, retracing the majority of the gains seen through yesterday's session in line with comfortable intra-day supplies, warmer outlooks over the balance of June and softening carbon markets," Marcel Boonaert, head of trading and portfolio at Wingas UK said.

Domestic output from the UK Continental Shelf grew by 8 mcm/day compared with Tuesday.

Flows through the Langeled pipeline from Norway steadied at 45 mcm, while flows through the Teesside PX terminal dropped to zero overnight from nearly 2 mcm.

Further along the curve, the July contract fell by 0.05 pence to 34.25 pence per therm.

In the Netherlands' gas market, the day-ahead price at the TTF hub was 0.23 euro lower at 14.70 euros per megawatt-hour.

In Europe's carbon market, the front-year EU allowance price rose by 0.04 euro to 6.16 euros a tonne. (Reporting by Oleg Vukmanovic in Milan; editing by Nina Chestney)

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