LONDON, July 5 (Reuters) - British prompt gas prices fell on Thursday morning due to an oversupplied network while traders trimmed positions on the back of uncertain fundamental outlook.
Forward prices were supported by crude oil gains.
Increased imports from the Netherlands and withdrawals from mid-range storage dragged gas prices for next-day delivery 0.55 pence lower to 57.35 pence a therm, while Thursday gas fell to 57.40 pence.
"The market is waiting for trading signals, there's a lot of pluses and minuses to the outlook...it's risk off for now," a trader from a European utility said.
Bullish factors include export restrictions from Norway's Kollsnes gas processing plant, extended strike actions by offshore workers and supply losses caused by gas maintenance in the UK.
Traders say the threat of further reductions in industrial demand for gas, due to adverse economic conditions across Europe, are somewhat offsetting the bullish supply outlook.
UK gas demand was expected to be 182 million cubic meters/day (mcm/day) on Thursday, some 8 mcm/day below supplies, according to National Grid data.
The medium-range storage facility at Holford flowed 8 mcm/day, accounting for the oversupply.
Despite this, Point Carbon said it expected gas prices to move sideways to around 57.9 pence a therm.
The UK's MetOffice said it expected current wet and mild weather to continue in the coming days, with "slow moving heavy and thundery showers on Friday" and further rain on Saturday and Sunday, with temperatures high above 20 degrees Celsius.
Further out on the curve, oil movements remained the key factor in the gas market.
Following a drop to below $90 a barrel in June, front-month Brent crude prices have risen back above $100 a barrel in London morning trade.
British gas prices for delivery next winter were trading at 65.8 pence a therm, up slightly since Wednesday morning.
The recent rises mean that the contract's price is now only slightly below its 50 exponential daily moving average (DMA) value of 66.25 pence.
The product has been trading below its 50, 100 and 200 DMA values since April, and while traders said the 50 DMA will provide a strong resistance marker, a rise above there could trigger a more sustained upward move. (Reporting by Oleg Vukmanovic; editing by James Jukwey)
