UK gas rises on cold, power down on high supply
* Rough stocks 44 pc below previous year
* Norway's Kollsnes gas processing plant near full capacity
LONDON, Jan 6 (Reuters) - UK gas prices reversed losses on Thursday as contracts edged higher after three days of losses on the return of colder weather, traders said.
Gas for delivery on Friday rose 0.80 pence to 58.00 pence per therm at 1005 GMT, while the month-ahead price traded at 57.80 pence ($8.97 per mmBtu), up 1.10 pence.
"People might have gone short yesterday and are now taking some profit," one gas trader said.
"Also, winter isn't over yet. I think people might have realised that we could still get some cold weather and could struggle with storage running low."
Stocks at Britain's largest storage site, Rough, were around 44 percent below levels seen at the same time last year on Thursday. The early onset of wintry weather conditions prompted gas suppliers to tap reserves over one month earlier this winter than in 2009.
For a graphic showing long-range storage levels and NBP February and March contracts, click here: here
The rapid decline in gas stocks has stirred up concern among traders that, if the next weeks hold a longer cold spell, they may not be sufficient to meet demand.
"There is enough there to get us to the end of February, so it's not a serious problem but we are at lower levels than we have been for a long time, if ever," another British gas trader said.
Prices also firmed in line with colder weather forecasts. The UK's Met Office predicted temperatures to rise above normal in southern England over the coming three to five days, but the rest of the country is expected to see further outbreaks of sleet and snow.
Gas demand was forecast slightly above normal levels on Thursday. Gas supply was strong, with high imports from Norway, liquefied natural gas (LNG) terminals and the Netherlands, National Grid data showed.
Norway's Kollsnes gas processing plant also returned to near full capacity, operator Gassco said, reducing risk of lower Norwegian supply over the rest of the winter. [ID:nOSN004918]
The Belgian gas interconnector was importing gas to Britain since the early hours on Thursday.
Britain's power market defied any impact from the bullish gas market, as strong supply due to high nuclear availability and imports from France helped meet demand.
Power for Friday delivery fell 0.35 pounds to 49.40 pounds per megawatt-hour (MWh), a loss which was also due to the usual dip in demand on Fridays on factories winding down ahead of the weekend.
National Grid data showed that only the Hinkley Point B8 reactor was off from its usual working nuclear fleet, although Dungeness B-21 and Hartlepool 1 are expected to go offline on Jan. 15 and Jan. 17, respectively. [POWER/GB]
Britain was importing around 1,000 MW from France on Thursday morning, network data showed, where high nuclear availability also helped weak prices. [POWER/FR]
(Reporting by Karolin Schaps)
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