LONDON, Jan 17 (Reuters) - Dutch and British wholesale gas prices edged lower on Friday morning as forecasts for milder temperatures curbed demand.

The benchmark front-month contract at the Dutch TTF hub

was down 0.30 euro at 46 euros per megawatt hour (MWh), or $13.88 /mmbtu, by 0925 GMT according to LSEG data.

The Dutch March contract was down 0.37 euros at 46.10 euros/MWh.

In Britain, the front-month contract contract fell by 0.71 pence to 116.1 p/therm.

“The over-riding bearish factor is the weather. The latest… forecast sees temperatures revised notably higher between Jan 20 – Feb 12,” LSEG head of European gas research Wayne Bryan said in a daily research note.

Some analysts said the need to refill Europe’s gas stores after winter was likely to provide some support for prices.

“Europe’s y/y (year-on-year) deficit in stocks has expanded to around 16 billion cubic metres (bcm), while it was just over 4 bcm by end-October 2024,” analysts at Energy Aspects said.

“We expect this deficit to expand to 25 bcm by end-March, making the summer stockbuild difficult to achieve without Europe maintaining high prices to continue to attract spot and divertible LNG supply,” they added.

Europe’s gas stores were 63.3% full, the latest data from Gas Infrastructure Europe showed.

In the European carbon market, the benchmark EU allowance $(EUA.UK)$ contract was up 1.36 euro at 79.69 euros a metric ton, having earlier traded at 79.75 euros, a 12-month high.

Carbon prices have risen over the past few weeks as colder weather ramped up demand for fossil-fuel power, while high gas prices have led to more coal power production which emits twice as much carbon dioxide as gas plants.

“As coal becomes more attractive in the energy mix, the demand for allowances also increases and speculative investors are taking on new long positions,” analyst at Energi Danmark said.

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(Reporting By Susanna Twidale; editing by Nina Chestney)

((susanna.twidale@thomsonreuters.com; +44 207 5424753;))