* Prompt prices around two-month highs
* System oversupplied by 18 mcm
LONDON Dec 30 British wholesale gas prices rose
to around two-month highs on Friday on expectations of higher
demand over the weekend and as oil prices gained ground.
Gas for immediate delivery was up 0.70 pence at
52.25 pence per therm at 1007 GMT, having fallen to an intra-day
low of 50.50 p in earlier trade.
The day-ahead contract rose by 2.40 pence to 53.55 p/therm,
its highest level since the beginning of November.
"There has been a bull run for the past few days, partly due
to colder weather but also due to oil prices and gains in UK
power," a trader said.
Volume is also quite thin due to the Christmas-New Year
holiday period, he added.
Thomson Reuters analysts said the temperature forecast for
Saturday is 2.8 degrees Celsius below normal, which should boost
demand for gas for heating.
Oil prices are on track for their biggest annual percentage
gain since 2009 on the back of an agreement struck between OPEC
and non-OPEC countries to cut crude production output.
The UK gas system is actually oversupplied by around 18
million cubic metres, with demand forecast at 297 mcm and flows
at 315 mcm/day, National Grid data shows.
Flows are back to 30 million cubic metres (mcm) per day from
Shell's St Fergus terminal after an outage ended and Engie E&p
UK's Cygnus offshore facilities have returned to full
Flows from the North Morecambe gas sub-terminal have also
resumed following an outage.
However, Norwegian gas capacity will be reduced by 7 mcm for
the next few days due to an outage at the Asgard gas field.
In the European Union's carbon market, the benchmark Dec-17
carbon contract was 0.13 euro higher at 6.50 euros a
In the Netherlands, the day-ahead gas price at the TTF
hub was 0.93 euro higher at 19.85 euros per megawatt
(Reporting by Nina Chestney)