British prompt gas and power prices fell on Tuesday as an outlook for milder weather and improved supplies took pressure from the system, while the forward market remained depressed on the weak economic outlook.
Within-day gas prices were trading at 52.65 pence per therm at 11:11 a.m. British time, down over a pence since the same time the previous day. Day-ahead gas prices were also down one pence to 52.25 pence per therm.
The weaker spot gas prices were a result of rising temperatures and healthy supplies.
Consumption is forecast substantially down this morning giving a clear bearish signal for day-ahead, analysts at Point Carbon said, adding that its price outlook was between 51 and 53.2 pence per therm.
The UK's Met Office said that weather conditions were expected to become much milder across England and Wales by Wednesday, with midday temperatures expected to rise from just above zero degrees Celsius on Tuesday to almost double-digit figures a day later.
Around 351 million cubic metres (mcm) per day, gas consumption for Tuesday was expected to be around 15.5 mcm above the seasonal norm, according to data from National Grid.
With supplies around 344.5 mcm, the system was only slightly undersupplied, and storage withdrawals would easily be able to compensate.
UK gas storage sites were filled to almost 85 percent on Monday, compared with a European average of 73 percent, according to Gas Infrastructure Europe.
In the power market, spot prices were also down, with the day-ahead baseload (24 hours delivery) contract shedding 3 pounds per megawatt-hour (MWh) to 40.50 pounds a MWh.
The drop came on the back of milder weather and the return of EDF Energy's 30 megawatt Sizewell B1 nuclear reactor to the grid.
Further out on the price curve, British summer gas prices remained at a 13-month low around 51.25 pence per therm as the economic outlook for Europe remained bleak and the gas market oversupplied.
(Reporting by Oleg Vukmanovic; Editing by Jane Baird)