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London - British wholesale natural gas prices continued to decline on Thursday morning as warmer weather curbed demand for the fuel and the supply outlook looked healthy.
Gas prices for next-day delivery fell 0.50 pence to 48.00p per therm at 09:00 GMT after touching a fresh two-and-a-half year low of 47.15p per therm on Wednesday.
Further out on the curve, the Winter 2014 contract fell 0.35p to 57.45p per therm.
The strength of sterling and lower oil prices were adding pressure to gas prices, traders said. Four LNG tankers are due to arrive in Britain over the next couple of weeks, likely putting further downward pressure on prices.
Britain's Met Office said temperatures for the rest of this week would remain above the seasonal average, sapping demand for the use of gas in heating systems.
However, next week temperatures are forecast to be cooler.
Gas for delivery on Thursday, however, was supported by a short-term undersupply of gas, as the system opened roughly 13 million cubic meters (mcm) short.
Gas for delivery within the day was trading at 48.40 pence per therm, up 0.25p.
Data from the National Grid forecast flows to be around 210 mcm and demand at 223 mcm per day, roughly 13% below the seasonal norm.
Norwegian flows were adjusted lower on April 1 due to end of the high-demand winter heating season.
"We expect Langeled flows to continue to be reduced in April, although flows will also depend on Continental take," analysts said.
In Britain's power markets, prices for baseload (24 hours) delivery rose 1.45 pounds per megawatt-hour (MWh) to 41.75 pounds per MWh as wind power production dropped off sharply.
