UK GAS-Prompt prices turn negative as supply rises to meet demand

LONDON, March 16 (Reuters) - Prompt British wholesale gas prices fell on Friday afternoon, reversing earlier gains as traders grew more confident supplies would be able to meet demand during a cold snap forecast for the next few days.

* Within-day gas was down 12.9 pence at 52.35 pence per therm at 1633 GMT.

* Day-ahead gas dropped by 9.5 pence to 55 p/therm.

* The weekend contract was down 12.8 pence at 52.5 p/therm.

* Prompt prices had risen on Friday morning as freezing temperatures were forecast to return to the country over the weekend.

* Traders said the morning gains looked over done and, in addition to price pressure from profit-taking, the market had gained confidence the gas system would be able to cope with high demand over the weekend and early next week.

* Weather forecasters monitored by Thomson Reuters (Dusseldorf: TOC.DU - news) gas analysts cut their temperature predictions for Monday by 6 degrees Celsius on Friday morning.

* "The underlying story of low storage levels and a lack of significant supply flex is keeping everything more volatile, with any potential outage or cold spell causing people to overreact pretty quickly," one market source said.

* The British market is expected to be oversupplied on Friday by 15 million cubic metres (mcm) a day, with demand forecast at 283.3 mcm and flows expected at 298.3 mcm/day, according to National Grid (LSE: NG.L - news) data at 1645 GMT.

* The Gemmata liquefied natural gas (LNG) tanker from the United (Shenzhen: 000925.SZ - news) States is due to arrive at Dragon on March 20 - the third tanker this month - and will be followed by Duhail from Qatar.

* Falling Asian gas prices are reigniting interest in northwest Europe as an LNG destination after winter shortages as Russia and the United States step up deliveries.

* The April British gas contract was down 0.4 pence at 50.05 pence/therm.

* Day-ahead gas at the Dutch TTF hub fell by 3.80 euros to 20.50 euros per megawatt-hour.

* The benchmark Dec (Shanghai: 600875.SS - news) -18 EU carbon contract eased by one euro cent to 11.18 euros a tonne.

* Thomson Reuters analyst view: http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageid=united-kingdom-gas. (Reporting by Susanna Twidale and Sabina Zawadzki Editing by David Goodman)