LONDON, Feb 1 (Reuters) - Near term wholesale British gas prices fell again as supplies from Norway surged higher on Tuesday, leaving the UK gas system overupplied, while concerns over the crisis in Egypt supported the far curve, traders said.
Gas prices fell on Monday as Norwegian gas exports to the UK recovered from last week's field maintenance, and prices plunged again early Tuesday as flows from Norway into Scotland and England jumped, cutting reliance on storage and liquefied natural gas (LNG).
Gas for delivery on Tuesday fell to 52.65 pence per therm by 1000 GMT, down about 0.85 pence from close on Monday, while contracts for Wednesday dipped to 52.55 pence and the new front month contract March fell to 52.60 pence ($8.46 per mmbtu).
But contracts from the second quarter of 2011 and beyond firmed, after a rally in crude oil prices. driven by concerns over unrest in Egypt impacting oil supplies. [O/R]
"The prompt is off but the curve staying firm," said one UK energy trader. "Egypt is pricing in more beyond the spot."
Higher oil prices imply higher gas costs for many major consumers in continental Europe, which may mean they buy more gas in Britain, driving up UK gas prices and power generation costs.
Summer 2011 rose 0.15 pence to 51.90 pence per therm at 1025 GMT, off earlier highs of 52.35 pence, while gas contracts for Winter 2011/12 rose 0.20 pence to 58.90 pence, according to one broker.
In the short term, imports from Norway via the Langeled pipeline nearly rose to around 70 million cubic metres (mcm) on Tuesday morning, while flows into Scotland via the Vesterled link jumped from 21 mcm to 40 mcm, National Grid data showed.
The surge in Norwegian supplies drove down inputs from the South Hook LNG terminal and resulted in lower storage withdrawals, helping ease concerns over supplies for the rest of winter.
Graphic showing within-day gas prices vs supply:
Prices in the over-the-counter (OTC) power market also fell, despite the shutdown of the 1,260-megawatt Sizewell B nuclear power station for maintenance [ID:nWLA4206] [POWER/GB], as cheaper gas weighed on prompt prices.
Baseload electricity for Wednesday fell to 46.10 pounds per megawatt-hour (MWh), about one pound less than day-ahead baseload prices late on Monday, while March baseload contracts softened 50 pence to 46.50 pounds per MWh.
(Reporting by Daniel Fineren)