* Gas for delivery next week down 0.70p at 48.00p/therm
* UK total gas demand fell 25 pct y-o-y in March
LONDON, April 4 British wholesale natural gas prices lost more ground on Friday morning as lack of demand due to a slightly warmer weather outlook outweighed an undersupplied market.
Gas prices for next-day delivery inched down by 0.05 pence from the previous settlement to 47.95 pence per therm, while gas for delivery next week was down 0.70 pence from the previous settlement at 48.00 pence per therm.
Slightly warmer temperatures are forecast from Sunday, according to the National Grid, which would reduce demand for gas for heating.
Britain's gas system was undersupplied by around 9 million cubic metres (mcm) on Friday morning, but demand was at 219.7 mcm, around 30 mcm below the seasonal norm.
Gas prices further out on the curve also all declined.
Gas for May delivery was down 0.52 pence at 47.88 pence per therm and the Winter gas contract was 0.45 pence lower at 60.00 pence per therm.
Britain's total gas demand in March fell by 25 percent compared to the previous year, the largest decline since December 2011, National Grid data showed.
Weather was the main reason behind the demand drop in March, said analysts at consultancy Energy Aspects.
March was around 0.74 degrees Celsius warmer than the five-year norm. The first two weeks of April are also forecast to be warmer than average.
For next winter, we expect colder weather and with falling UK production and more gas into power due to coal plant closures, this could leave the market tighter," the analysts said.
"While ample gas in storage and higher imports of gas through the InterconnectorUK will be more than enough to balance the UK market, net gas storage withdrawals even in Q4 14 will have to be higher than seen in Q4 13," they added. (Reporting by Nina Chestney, editing by William Hardy)