LONDON: British wholesale natural gas prices rose on Monday morning as the system opened slightly undersupplied, but analysts said they expected prices to slip as demand eases along with milder weather conditions.
Gas for delivery the next day rose 0.40 pence per therm between Friday and Monday morning to 64.85 pence 0900 GMT, and prices for within-day delivery were trading at 65.30 pence a therm.
Traders said Monday morning's rise was a result of an undersupplied system.
"We opened short this morning, and storage withdrawals are continuing," one gas trader said.
Monday's gas demand was expected to be 249 million cubic metres (mcm), 3 percent below the seasonal norm, but around 7.5 mcm short of expected demand, according to data from National Grid.
Britain's gas storage sites are filled to an average level of 94.8 percent, down from over 98 percent at the beginning of the month, data from Gas Infrastructure Europe shows.
In Britain's over-the-counter spot power market, prices rose 25 pence to 47.40 pounds per megawatt hour.
Despite the short system, analysts said they expected prices to ease.
"Consumption is forecast 41 mcm/d down, which is a strong bearish signal for the day-ahead contract and the main price driver for this morning," analysts at Thomson Reuters Point Carbon wrote, adding they expected prices to range between 63.30 and 64.60 pence per therm.
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