Im wondering were any of the red lanterns or candles are in morrowind. i would also like to know if there are and merchents with restocking lanterns or candles. i need as much as i can get for my house at the balmora temple.

Despite the abundance of red candles in sixth house bases these cannot be picked up. So the few that I know of that can be "obtained" are -

Red candles -

Desele's House of Earthly Delight, Suran. (x4)
Senim Ancestral Tomb. (x1)
Morag Tong Guildhall, Ald-ruhn. (x6)

Tel Branora, Tower Dungeon. (x1)
Mawia. (x1)
Sorkvild's Tower, Dagon Fel. (x1)

Red Lanterns -

Ihinpalit Shrine. (x1)
Arenim manor, Gnaar Mok. (x1)

thanks, much appreciated