LONDON: Wholesale natural gas and power prices rose in Britain on Thursday as reduced gas flows from Norway and the Netherlands and the extension of nuclear plant outages tightened supply.
Gas for delivery on Friday was trading at 49.25 pence per therm by 0816 GMT, 1.25 pence or 2.6 percent higher than the previous settlement. Gas for immediate delivery was up 1.75 pence or 3.65 percent at 49.75 pence/therm.
Britain's gas system was under-supplied by around 12 million cubic metres (mcm) on Thursday, National Grid data showed, as flows were forecast at 162.3 mcm and demand at 174.4 mcm.
The shortfall was due to reduced physical gas flows from Norway and the Netherlands.
Weekend temperatures in Britain are also forecast to be slightly cooler than now but still above the seasonal norm.
In Britain's power market, prices also rose. Day-ahead baseload (24 hours) power prices were up 0.20 pounds at 43.40 pounds per megawatt hour.
Five nuclear reactors with a combined capacity of around 2.8 gigawatts are still offline due to maintenance at one and inspections at the four others.
Operator EDF Energy said the four reactors at its Hartlepool and Heysham 1 nuclear plants would return to service gradually between end-October and end-December.
Initially, the company had estimated they might come back online in the first week of October
"Confirmation that these plants might not be generating (electricity) for the first few months of the winter season has helped to push up prices this morning," a UK gas trader said.
Traders are still eyeing developments in the Ukraine.
President Vladimir Putin outlined plans for a ceasefire in eastern Ukraine on Wednesday but Ukraine's prime minister dismissed the proposal.
"Any development regarding the ongoing discussion for a ceasefire in eastern Ukraine could significantly impact TTF (Dutch gas) prices today," said analysts at Thomson Reuters Point Carbon.
"In addition, Europe is planning on imposing additional sanctions on Russia though these will not impact the gas market. It could still have a somewhat bullish impact on European gas prices," they added.
Further along the gas curve, gas for delivery in the winter 2014-2015 season rose by 1.00 pence to 60.60 pence/therm, while summer 2015 prices increased by 1.55 pence to 56.25 pence/therm.
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