British gas prices slumped to new lows by midday on Monday as warmer weather reduced demand for gas for heating systems.
Gas prices for next-day delivery were trading at levels last seen two-and-a-half years ago, while summer gas prices slumped to record lows.
Gas for delivery on Tuesday sank below 50 pence per therm for the first time since October 2011, trading at 49.70 pence per therm by 1056 GMT, down 2.15 pence or 4.15 percent from Friday’s close.
Further along the curve, the price of gas for delivery this summer was trading 1.73 pence or 3.26 percent lower at 51.40 pence per therm, a record low.
“Prompt and curve prices have continued to fall this morning on the back of higher temperature forecasts, strong sterling against the euro and a marginal fall in carbon prices,” a UK gas trader said.
Sterling fell against the euro on Monday on softer UK data, while year-ahead benchmark European Union carbon prices fell 2 percent to 4.30 euros ($5.91) a tonne.
On the demand side, a mild winter has already left gas inventories unusually full for the time of year and mild conditions look set to continue, further reducing demand for gas.
Demand for gas was forecast to be around 226 million cubic metres (mcm) on Monday, 32 mcm below the seasonal norm of 258 mcm, according to the National Grid.
UK GAS-Prices slump to new lows on warmer weather