UK prompt gas prices firm on reduced Norwegian supplies
* UK gas system seen 23.6 mcm/d undersupplied
* Output from Nyhamna gas plant reduced by 35 mcm/day
* Colder weather lifts demand
LONDON, Oct 10 (Reuters) - British prompt gas prices rose on Wednesday as higher demand and shortages caused by lower Norwegian exports left the market short by 23.6 million cubic metres (mcm), National Grid data showed.
Gas for day-ahead delivery rose by 0.70 pence per therm on Wednesday morning to 64.70 pence at 0820 GMT.
"Norwegian supply is getting shakier just as gas demand in the UK is picking up, so the market is putting a risk premium on prices here," one gas trader said.
Flows through the Langeled pipeline that connects Norway with Britain dropped to around 13 mcm this morning, National Grid data showed.
Norwegian gas exports have been hit by disruptions at Royal Dutch Shell's Nyhamna gas processing plant, where output has been cut by 35 mcm per day for an unknown duration due to a pump failure, gas system operator Gassco said on Wednesday.
Britain's gas market supply was expected to be 182.9 mcm on Wednesday, National Grid data showed, leaving the market short with demand running just 6 percent below seasonal average at 206.5 mcm.
Traders said colder weather has helped to lift demand which was languishing around 30 percent lower than the season average for much of last week, before the temperature dropped.
Further out on the curve the Summer 2013 contract ticked up 0.08 pence to 61.13 pence per therm with gains contained by a sluggish oil market.
Front-month Brent crude prices slipped to near $114 per barrel on Wednesday morning as fears about demand, due to the weak global economic outlook, halted bullish sentiment that had seen the contract rise 2 percent the previous session.
Analysts at Societe Generale said the Summer 2013 gas price looks vulnerable at these high levels.
"At today's prices gas is too expensive a fuel for Europe. We therefore remain more bearish than the future curve. We recommend selling NBP Summer 13 as we believe the forward curve has not taken into account the 11bcm of gas already 'pre-paid' by European companies," Societe Generale said in a research note on Wednesday.
In Britain's power market prompt prices edged higher on the back of the tightness in the gas system and the colder UK weather.
Prices for baseload day-ahead power rose 53 pence to 46.28 pounds per megawatt hour (MWh).
(Reporting by Susanna Twidale, additional reporting by Henning Gloystein; editing by James Jukwey)
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Keywords: MARKETS BRITAIN GAS/POWER