UK gas market glut triggers wider price slump
* Milder weather forecast adds downward pressure
* Mid-range storage faces risk of running dry
* UK oversupplied by 43 mcm, or 11 pct of demand
LONDON, Jan 18 (Reuters) - British prompt gas prices on Friday morning slumped as the network struggled to deal with a glut of supply from Norway and Europe while demand fell due to revised weather forecasts.
Producers boosted exports to Britain after the price of gas for Friday delivery hit 11-month highs in the previous trading session, one trader said.
Deals struck at those prices also prompted rapid withdrawals from mid-range storage facilities, raising concerns that sites could run themselves dry if they continue withdrawing at current rates, analysts at Thomson Reuters Point Carbon said.
The extreme level of oversupply helped erode prices across the board on Friday, prices compiled from broker data show.
The price of the day-ahead gas contract at 1000 GMT shed 1.85 pence to 70.50 pence.
"The outlook for the UK day-ahead contract today is bearish, as local heating demand is forecasted down from our previous forecast," analysts at Thomson Reuters Point Carbon said.
Britain's gas market was oversupplied by around 43 million cubic metres/day (mcm) - roughly 11 percent of total UK demand - thanks to greater imports from Norway and Belgium and strong withdrawals from storage facilities.
"The new forecast expects warmer weather near the end of the next 15 days, which may pull down UK gas prices on the curve and eventually affect the prompt," Point Carbon meteorologists and analysts said.
Gas flows through Total's St. Fergus gas terminal will resume normal output on Friday following an unplanned outage on Tuesday, which cut supply by 10 mcm.
Gas for Friday delivery was at 69.40 pence, down 1.10 pence from Thursday's close. It hit an intraday high of 74 pence on Thursday.
Britain's Met office forecast heavy snow for much of the UK on Friday, but ample gas supplies offset the impact of sub-zero temperatures.
The National Grid forecast gas demand for the day at 389 mcm, about a quarter higher than average but down from forecasts made on Thursday of 400 mcm.
Gas piped from the UK gas fields rose to 138 mcm early on Friday from 127 mcm on Thursday, National Grid data showed.
Supply from the Britain-Belgium interconnector increased to 50 mcm from 34 mcm, which added to the oversupply, flow data shows.
Mid-range storage sites Aldbrough, Holford and Hornsea pumped out 22 mcm, 16 mcm and 17 mcm, respectively, which is significantly higher than Thursday levels.
Britain is likely to remain gripped by icy weather well into next week, the Met Office said.
Meanwhile the front-season NBP contract fell half a penny to 61.90 pence, tracking crude oil prices which slipped below $111 a barrel.
In the electricity market, baseload day-ahead power traded at 53.75 pounds per megawatt-hour, down around 25 pence from the previous close. (Reporting by Oleg Vukmanovic, Editing by Mike Nesbit)