Day-ahead gas rose in value Monday morning on the UK's NBP gas trading hub as the the deadline in Norway for a threatened total shut-in of production looms.
The Norwegian government would not indicate if it would intervene to stop a strike after talks between unions, oil industry body the OLF and a government mediator broke-down over the weekend.
However, despite the threat of the potentially crippling shut-in of production at midnight CET Monday, price gains were not extreme as the market still expects the government to step in, a source at a utility said.
The day-ahead contract was trading at 59.10 pence/therm at midday in London, up by 0.75 p/th from Friday's close. The within-day contract drifted 0.10 p/th lower to 58.50 p/th as the system remained well supplied throughout the morning.
Forecast demand for the day by National Grid was pegged at 165 million cubic meters with forecast flow 13 million cu m higher.
Also contributing to the bullish day-ahead price were expectations of demand on Tuesday picking up to 180 million cu m, a market analyst said.
Gas for delivery in August heard a similar gain to the day-ahead price, rising by 0.70 p/th to 57.40 p/th.
Contracts also heard gains further out with firming oil prices providing support.
Crude futures edged higher in midday European trading, supported by supply concerns. At 1050 GMT, August ICE Brent traded 81 cents higher at $99.00/barrel.
Q4 12 and Winter 12 gas contracts each pushed 0.25 p/th higher to 63.30 p/th and 65.25 p/th, respectively.
Summer 13 was trading at 58.60 p/th, up by 0.35 p/th, and Winter 13 gained 0.30 p/th at 66.70 p/th.
