UK gas firms as colder weather returns
* Wed gas demand 1.5 pct above normal
* Rough storage levels rise
LONDON, Jan 19 (Reuters) - British gas prices rose early on Wednesday as colder weather returned and lifted demand levels, but liquefied natural gas (LNG) supply flexibility and rising long-range gas stocks eased concerns about further price hikes.
Temperatures in Britain dropped on Wednesday, with weather turning chilly and frost spreading, the Met Office said.
The return of cold weather conditions prompted gas demand to rise above seasonal averages, after at least one week of below-normal consumption.
National Grid forecast Wednesday gas demand to rise 1.5 percent above seasonal norms.
Day-ahead gas prices rose 0.60 pence to 56.40 pence per therm at 1100 GMT, while weekend prices traded at 56.05 pence, up 0.55 pence from the previous session.
"Some see the weather a bit colder and that's probably why they buy; others see coal going slightly up, but it's all trading in a very narrow range," one British gas trader said.
Despite higher demand levels, the gas system was well supplied, especially with strong input from LNG terminals at nearly 100 million cubic metres, according to National Grid data.
"At the moment, I think (LNG terminals) have a lot of flexibility to do pretty much what they want, so I wouldn't expect major changes in prices for some time," the trader said.
Supply from Norway via the Langeled pipeline and from the Netherlands also added nearly 100 mcm to the system.
Gas prices for delivery in February traded higher in line with the prompt, but gains were minor as supply and weather forecasts gave a more bearish outlook.
February traded at 56.00 pence ($8.96 per mmBtu), up 0.15 pence from the previous session. March added 0.35 pence to 55.75 pence.
Britain's long-range storage levels continued rising on Wednesday as suppliers did not need to tap resources because demand was being met through other means.
For a graph showing Britain's long-range gas storage levels click here: here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
British power prices moved higher in line with colder weather, but also found support from other commodities, despite healthy supply, traders said.
"The power system is so comfortable with so much supply, that the fundamentals are less significant. We always price at the marginal fuel, hence we follow coal/gas moves closely until we get some power specific inputs," one UK-based power trader said.
Power for delivery on Thursday traded more than one pound above the previous session at 48.75 pounds per megawatt-hour (MWh).
All but two nuclear reactors were connected to the grid on Wednesday and latest National Grid plant availability data showed EDF Energy's Heysham B-8 nuclear reactor would return to service on Wednesday. [ID:nLDE70G1HG] (Reporting by Karolin Schaps; Editing by Alison Birrane)
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