October 30, 2012 / 10:19 AM / 5 years ago

UK gas prices rise on tight system

* Market seen easing Wednesday on warmer weather

* Bullish technicals lift forward curve

LONDON, Oct 30 (Reuters) - British prompt gas prices rose slightly between Monday and Tuesday morning as the system was slightly undersupplied but analysts said they expected prices to ease as Norwegian exports were forecast to improve.

Gas for Wednesday delivery rose 0.30 pence to 67.60 pence a therm at 0900 GMT due to a slightly undersupplied system.

Britain's gas demand was expected to be 255.3 million cubic metres (mcm) on Tuesday, data from National Grid showed, and with supplies seen at 251.8 mcm, the system would be left 3.5 mcm undersupplied.

But analysts said that they expected prices to ease as consumption was seen falling and supplies from Norway were set to improve.

"Consumption is forecast down for day-ahead, giving a bearish signal for the NBP day-ahead (gas) contract. On the supply side, flows through the Langeled (pipeline from Norway)are up, adding to the bearish picture and we expect a less tight situation for day-ahead compared to today," analysts at Thomson Reuters Point Carbon said.

The UK's MetOffice said it expected maximum temperatures to rise from 12 degrees Celsius on Tuesday to 14 degrees on Wednesday, easing heating demand.

But the MetOffice said that temperatures were expected to drop back to highs of just over 10 degrees later in the week.

In the power markets, prices for baseload (24 hours) delivery the next day dropped 1.7 pounds per megawatt-hour (MWh) to 48.80 pounds a MWh.

Further out on the curve, prices for delivery next summer were up 0.6 pence a therm to 62.50 pence, despite a drop in front-month Brent crude prices under $110 per barrel.

Technical indicators supported the gas price rise, with the contract's moving average convergence-divergence (MACD) signals about to cross into bullish territory, and the 100 exponential daily moving average (DMA) value about to cross its 200 DMA for the first time since December 2011. (Reporting by Henning Gloystein; Editing by Helen Massy-Beresford)

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