January 31, 2014 / 11:51 AM / 4 years ago

UK GAS-Mild winter pushes summer gas price to lowest since Aug. 2012

* UK Summer 2014 contracts drop to 60 p/th

* UK S14 gas prices: link.reuters.com/tak56v

* Storage levels 25 pct points above Jan. 31 2013

LONDON, Jan 31 (Reuters) - British gas prices for delivery next summer dropped to their lowest levels since summer 2012 as a mild winter so far has created a storage overhang that clashes with healthy North Sea supplies.

Meteorologists also expected Britain’s average temperatures to rise from the current 4.2 degrees Celsius, in line with the seasonal norm, towards relatively mild weather of 5-8 degrees during the first two weeks of February.

“Unless we see a sudden and sharp drop in temperatures that lasts for a couple of weeks, or there is a major gas supply outage, prices may drop further still,” one gas trader said.

Gas prices for delivery during the 2014 summer periods were trading at 60 pence per therm at 1120 GMT, their lowest level since the beginning of August 2012.

Spot gas prices for delivery the next day were also down, trading at 61 pence a therm on Friday morning, their lowest level since the beginning of winter.

Britain’s gas storage sites are filled to an average of 74.47 percent, according to Gas Infrastructure Europe, compared with levels of under 50 percent at this time last year.

At the same time, Britain’s daily gas demand of around 300 million cubic metres (mcm) has been typically met by supplies slightly above that level, leaving the system oversupplied.

Reporting by Henning Gloystein

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