UK gas sheds value as mild weather cuts demand

* Demand over Christmas week seen at 181 mcm

* Britain will likely export gas next week

* Mild weather expected over the next fortnight

LONDON, Dec 17 (Reuters) - British gas prices fell on Monday chiefly because milder weather reduced central heating demand and higher flows from North Sea fields meant the transmission network was oversupplied.

The price outlook over the Christmas holiday period next week was even more bearish due to expectations that demand could drop further, leading to more oversupply, analysts and traders said.

The price of gas for Tuesday delivery fell 0.65 pence to 65.80 pence a therm at 1200 GMT, price data showed. Gas for next week delivery fell 1.25 pence to 65 pence, reflecting weak demand outlooks.

Britain's gas market was oversupplied by 10 million cubic metres/day (mcm), flow data shows.

Analysts at Point Carbon expect gas demand next week to drop to 181 mcm, compared with 296.8 mcm currently, as industries and businesses use less energy during the holiday period.

"During this time, there may be room for storage injection and the Britain-Belgium gas interconnector may even switch to export mode," Point Carbon said.

Britain is currently importing around 6 mcm/day from Belgium through the sub-sea gas link, real-time flow data shows. The country has been importing gas from Belgium since the start of the new gas year in October, with combined imports over October-November (Xetra: A0Z24E - news) hitting a record.

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UK gas sheds value as mild weather cuts demand