LONDON: British prompt gas prices rose on Tuesday morning as renewed problems with Norwegian exports reduced supplies to the UK. Gas for within-day delivery rose by 2.05 pence per therm between Monday and Tuesday morning to 64.25 pence at 0845 GMT, and gas for delivery the next day rose by 1.4 pence to 63.70 pence per therm.
Traders and analysts said the price rises were a result of ongoing problems at Norway's gas export facilities.
"Norwegian production has been shaky throughout the past weeks, just at the time when gas demand is rising because of the beginning of autumn, so prices are being adjusted upward accordingly," one gas trader said.
Gas demand for Tuesday was expected to be 210 million cubic metres (mcm), just 5 percent below the seasonal norm, according to data from National Grid.
At expected flows of 198.6 mcm, the system was seen to be over 10 mcm short, requiring either imports from continental Europe or storage withdrawals.
Britain's gas needs have so far been between 20 and 30 percent the seasonal norm for much of this year as the weak economy hampers demand and more profitable coal-fired power generation reduced gas burning by utilities.
The tight gas system also affected the power market, where prices for baseload (24 hours) delivery the next day moved up 5 pence per megawatt-hour (MWh) to 45.75 pounds per MWh.
Analysts said they expected the system to ease on Wednesday as Norwegian supplies were set to improve.
"Langeled (Norwegian pipeline flows) are expected to be up on Wednesday as the outage at Nyhamna gas processing plant is due to end," analysts at Thomson Reuters Point Carbon said.
Further out on the curve, the picture was less tight.
Gas prices for delivery next summer were trading at 60.75 pence per therm on Tuesday morning, flat with Monday.
"The focus is all on the shaky spot supply at the moment while the fundamentals for next season have pretty much remained the same, explaining the lack of price movement in the forwards," the gas trader said.
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