UK GAS-Spot price drops 11 percent on warm spell and more supply

LONDON, May 22 (Reuters) - British spot gas prices dropped 11 percent on Monday as warmer-than-expected temperatures sapped demand and higher Norwegian deliveries made the system oversupplied. * Within-day contract 4.45 pence or 11 percent lower at 46.00 pence per therm at 0848 GMT. * British day-ahead gas price down by 1.50 pence to 36.40 pence per therm. * Traders said higher Norwegian supply following the end of maintenance at the Troll gas field, coupled with unexpectedly warm weather, had spurred losses on key prompt contracts. * "Temperatures are warmer than forecast last week, so demand is down. Norwegian flows have also stepped up as maintenance has come to an end," one trade source said. * Average temperatures on Monday were up to 4.3 degrees Celsius higher than expected; temperatures for the coming weekend are forecast up to 6.4 degrees Celsius above earlier expectations. * Warner (NYSE: TWX - news) weather is reducing local distribution zone demand for gas, traders and analysts said. * Higher demand for gas in the power generation sector, however, helped prevent steeper price declines. * Most of Europe should experience above-normal temperatures from June to August, except the north of Britain and most of Scandinavia, the Weather Company said on Monday. * Gas deliveries from Norway through the Langeled pipeline rose to 38 million cubic metres/day (mcm) from 22 mcm on Friday, lifted by the return of production from Troll over the weekend, analysts said. * Britain's gas system was oversupplied by 24 mcm with demand forecast at 186.3 mcm and flows at 206.3 mcm, National Grid (LSE: NG.L - news) data shows. * The first liquefied natural gas (LNG) delivery from Cheniere Energy's Sabine Pass LNG export plant in the United States to the Netherlands will arrive on June 7. * Further along the curve, the June gas contract was down by 0.55 pence at 36.05 p/therm. * Day-ahead gas price at the Dutch TTF hub edged down by 0.03 euro to 15.27 euros per megawatt hour. * Benchmark Dec-17 EU carbon contract up by 0.02 euro to 4.87 euros a tonne. * Thomson Reuters (Dusseldorf: TOC.DU - news) analyst view: (Reporting by Oleg Vukmanovic; editing by Nina Chestney)

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