NORDIC POWER-Front-quarter surges on dry weather outlook

* Spot price for Tuesday set at 45.9 euros/MWh

* Hydro balance seen falling to minus 29 TWh

OSLO, March 25 (Reuters) - Nordic prices for power delivery in the second quarter surged on Monday, as new forecasts dented hopes for wetter weather in the hydro-dependent region, traders said.

The benchmark front-quarter contract

rose by 1.25 euros to 40.95 euros ($53.22)per megawatt-hour (MWh) by 1230 GMT, a price level not seen since end-December, and well above the equivalent German contract

.

"The hydro situation is strained over the huge deficit, so there is a certain potential for big price moves, and prices are already much above Germany," a Norway-based trader said.

"The weather has been more bullish than we expected, and this dry period seems to hold for at least 10-15 days more" he added.

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CHART-Nordic front quarter power:

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Meteorologists said the new forecasts showed high pressure preventing wetter weather from the Atlantic entering Scandinavia, which has already seen its water reservoirs fall to below long-term median levels.

"Atlantic lows will not have a chance to enter the continent... leaving Central Europe and Scandinavia under dry and cold conditions," said Georg Muller, a meteorologist at Point Carbon, a Thomson Reuters company.

He added a major breakthrough of wetter and milder weather seemed unlikely in the next two weeks.

Hydro energy balance, which includes water stored in reservoirs and snow pack, was to move close to 30 terawatt-hours (TWh) below normal by April 7, Point Carbon data showed.

Further out on the curve, the Nordic contract for baseload power delivery in 2014

was trading 65 cents higher at 38.25 euros a MWh, lifted by higher carbon and coal prices.

The benchmark European Union (EU) carbon contract

firmed by 24 cents to 4.39 euros a tonne, while coal API2 2014 futures

gained by 25 cents to $92.85.

Brent crude rose above $108 on Monday after Cyprus secured a last-minute bailout deal, averting a deeper euro zone crisis and boosting the outlook for oil demand in the troubled region.

SPOT PRICE

The Nordic average day-ahead power price

for

Tuesday delivery came out at 45.9 euros a megawatt-hour (MWh), below market expectations, and compared with 46.4 euros for Monday.

The day-ahead contract in the financial market was last quoted in a bid-ask spread of 46.75 euros and 47.5 euros a MWh.

Analysts at Point Carbon said the spot price eased on higher imports from Germany, and an increase in hydro power production capacities, partly offset by slightly lower wind power output.

Sweden's Forsmark-2 nuclear reactor started to ramp up power output to 1,014 MW on Monday morning, the plant's operator said in a market message.

The reactor plans to increase its output gradually to a new capacity of 1,120 MW by May 11.

($1 = 0.7694 euros)

(Reporting by Nerijus Adomaitis; editing by James Jukwey)

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Keywords: MARKETS NORDIC/ELECTRICITY