LONDON: British wholesale gas and power prices rose strongly on Wednesday morning as supply disruption from Norway and an increase in the amount of gas injected into storage offset the impact of mild weather.
Gas prices for delivery within the day were trading at 66.65 pence per therm at 0825 GMT, up 0.55 pence from Tuesday's close, while prices for delivery the next day were up 0.90 pence to 66.60 pence a therm.
Power prices for baseload (24 hours) delivery on Thursday leapt 3.20 pounds per megawatt-hour (MWh) to 49.20 pounds a MWh.
"The gas system is very short this morning. An outage at one of Statoil's Norwegian gas fields means less gas is being pumped into the St Fergus Shell terminal," one utility trader said.
The system was around 24 million cubic metres (mcm) short after supply fell to 176 mcm, as flows from Norway to Britain fell 8 mcm because less gas was being pumped through the Vesterled pipeline.
Norwegian gas producer Statoil on Wednesday reported a field outage, but did not identify the location.
The amount of gas coming into the St Fergus Shell terminal fell to 6 mcm this morning, less a third of the normal intake and down from 13 mcm on Tuesday when flows were already low because of maintenance impacting the SEGAL gas line.
Britain's gas demand was expected to be 200 million on Wednesday, up from 188.2 million cubic metres (mcm) on Tuesday, but still 12 percent below the seasonal norm, according to National Grid.
Around 39 mcm of gas was earmarked for storage on Thursday, as cheaper spot prices compared to further-ahead contracts provided an incentive.
Prices for gas delivered Monday to Friday next week gained to 67.80 pence, up 0.8 pence on the previous day and a 1.20 pence premium to the prompt.
"The indication is that storage facilities are looking for a significant surge in stock levels prior to higher demand starting next week. The need to fill stocks may push up prices," Thomson Reuters Point Carbon said in a daily report.
But the actual amount to be pumped into underground repositories on Wednesday is unlikely to be lower than nominations because of near-term market tightness, it added.
Britain's Met Office said weather would remain mild into the weekend, but minimum temperatures are expected to drop by Saturday.
UK wind power generation was around 3,400 megawatt-hour (MWh) closer to its daily average of 3,000 megawatt-hour (MWh) than the 4,000 MWh seen on Tuesday.
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