Record oil pushes gas and power to new highs

LONDON (Reuters) - Gas and power prices for forward delivery touched new peaks in early trade on Thursday after oil extended its record-breaking rally.

Gas for delivery in Winter 2008 touched 93 pence per therm before easing slightly to 92.85 pence, up 1.42 on the day.

Long-term gas can be priced off oil products and its strength had a knock-on effect on power, which can be generated from gas.

Winter 2008 power rose to 82.75, up from the previous close of 81 pounds per megawatt hour.

"Oil is the flavour of the month, the quarter, the year," one gas trader said.

"There was some quite aggressive buying by banks early this morning," he said of the record gas prices, adding they had softened slightly after technical stops were hit.

U.S. crude hit a new record of $135.04 on Thursday.

The prompt power and gas market was well supplied as milder weather depressed demand.

Gas demand was 49 million cubic metres (mcm) below the seasonal norm, according to the National Grid website, and the system was long by 17.4 mcm.