UK GAS-Prices edge up on possible new EU sanctions against Russia

* System 8 mcm long due to higher UK North Sea flows

* Fear of new sanctions against Russia creates risk premium

* EU ambassadors to discuss Russian sanctions

LONDON, July 24 (Reuters) - Wholesale natural gas prices in Britain rose on Thursday as the threat of economic sanctions on Russia offset ample supply.

Gas prices for delivery the next day were trading at 37.60 pence per therm at 0855 GMT, up 0.35 pence since their last close, while prices for delivery within the day were up 0.05 pence to 37.25 pence a therm.

"There's a fear that five months up the line, or even before, flows from Russia to Europe may get disrupted," an analyst said.

"That means that traders are closing short positions which is supporting prices even though the physical fundamentals at the moment point bearish."

Meteorologists said that average British temperatures were expected to remain around 3 degrees Celsius above the seasonal norm of 16.3 degrees on Thursday and Friday, before dropping to more typical levels over the weekend and into next week.

Further down the curve, prices for delivery during the peak demand winter season were also up, gaining 0.25 pence to 59.10 pence a therm.

Winter prices have now gained 7.5 percent after falling to record lows in early July on the back of an unusually mild winter, spring and beginning to summer.

LONG SYSTEM

The British gas system was estimated to be oversupplied by around 8 million cubic metres (mcm) on Thursday, according to the National Grid (LSE: NG.L - news) , with demand for the day forecast at 170.3 mcm.

The system has been oversupplied for most of the year so far due to mild weather, regular imports and ample inventories.

British North Sea gas flows, known as UK Continental Shelf (UKCS) flows, were at 113 mcm/day early on Thursday, 3 mcm lower than what was nominated for the day.

However, planned maintenance during the first two weeks of August is expected to hit UKCS production, leading to higher injections of gas into storage in the run-up to that.

European Union ambassadors will meet in Brussels on Thursday to debate proposals on restricting Russian access to Europe's capital markets and defence and energy technology.

The European Union has threatened Russia with harsher restrictions that could inflict wider damage on its economy following the downing of a Malaysian airliner.

The analysts added that sanctions expected to be imposed on Russia in the coming days over the Ukraine crisis could be bullish for the prompt contract.

"There is chance of additional support from further depreciation in sterling against the Euro, a correction from 23 month highs beginning yesterday and continuing into this morning thanks to extremely positive data out of Europe," a gas trader said. (Reporting by Rowena Caine, editing by William Hardy)