UK natural gas for same-day delivery rose to 108 pence/therm Monday morning -- a price the market has not closed above since 2006 -- due to unplanned North Sea outages.
Stormy weather caused a failure in the Norwegian power grid system leading to the Nyhamma gas processing plant losing 53 million cubic meters/day of production, Gassco said.
Gas from Nyhamma is fed into the Langeled pipeline for transport to the UK or via Sleipner to Continental Europe.
Flows of gas from Norway to the UK via the UK's Easington Langeled terminal were at 50 million cu m/day Monday morning, down from 70 million cu m/d last week.
The outage is expected to last 24 hours through to 6:00 am CET (0500 GMT) Tuesday.
The day-ahead gas contract also rose, from 71.00 p/th at market close Friday, to 79.75 p/th at 1030 GMT.
Also affecting supply was the closure of the UK's Brent oil pipeline system which impacts gas flows into the St Fergus gas terminal.
The Cormorant Alpha platform in the northern part of the UK North Sea and all related pipeline infrastructure were shut down at 0940 GMT Saturday as a precaution after oil was discovered in one of the legs of the platform, owner TAQA said.
At 1000 GMT, the UK gas system remained heavily short of supply, by 48 million cubic meters, with National Grid forecasting the day's demand at 306 million cu m.
"I would expect a significant increase in mid-range storage activity despite these facilities having been heavily utilized in recent weeks," an analyst at Platts' unit Bentek Energy said.
"[Long-range storage facility] Rough was nominating withdrawals of 35 million cu m but should ramp up to 44 million cu m. Hornsea and Holford were nominating injections of 20 million cu m between them. This will likely not happen but raises the question as to whether there are current medium-range reserves to help meet the shortfall in Norwegian supply," Bentek said.
UK gas and power traders expressed concern over supply, especially in light of the potential colder weather could have on already depleted stocks.
"If more cold weather comes, I don't know where the additional supply will come from," a UK-based power trader told Platts.
"We are maxed out on all local and nearby supply. LNG is our only hope but the Qataris are focusing on their long-term customers [and we] haven't seen anything for a while," he added.
UK POWER MARKET HITS 13 MONTH HIGHS
Prompt baseload power on the UK's wholesale market surged over 22% from Friday's closing price following gains on the UK's NBP gas market.
Shortly after 1100 GMT baseload power for Tuesday delivery was heard GBP11.40 higher than its previous close at GBP63/MWh, its highest price since the contract closed at GBP64.75/MWh on February 7, 2012, Platts data shows.
Baseload power on the N2EX day-ahead power auction held on Sunday and Monday outturned even higher than OTC at GBP63.07/MWh for Monday delivery and GBP63.82/MWh for Tuesday delivery.
Meanwhile, peakload power power on the OTC market climbed GBP12 above Friday's close to GBP68.85/MWh at 1100 GMT.
Although coal-fired power makes up the majority of the UK's electricity production, gas-fired power output typically contributes around 30% of the generation mix, leaving power prices sensitive to pricing levels.
However, the market didn't spike as dramatically as the NBP because alternative supply options elsewhere in the market remained stable.
"It's a slightly different shock [for the power market]," a UK power trader told Platts.
"It's just the fuel price of marginal plant which has gone up -- we haven't lost any plants or experienced a weather-related price spike... so we're not needing to move to next marginal plant, such as oil-fired power," he said.
UK power demand is set to fall from 51.7 GW to 50.4 GW Tuesday while supply remains supported by nuclear generation of near 7 GW, forecast wind output of over 1.5 GW Tuesday evening and coal-fired power above 20 GW, National Grid data shows.
