UK GAS-Prices edge higher on undersupply, oil market gains

LONDON, May 15 (Reuters) - British prompt gas prices edged higher on Monday morning in a slightly undersupplied system, while prices further along the curve were buoyed by gains in oil markets. * British day-ahead gas price up by 0.35 pence to 39.50 pence per therm at 0821 GMT. * Within-day contract flat at 40.00 p/therm. * Gas system undersupplied by 6.5 million cubic metres (mcm) with demand forecast at 187.2 mcm and flows at 180.7 mcm/day, National Grid (LSE: NG.L - news) data showed. * Traders said despite the slight undersupply, prompt price gains were muted as demand for gas from power plants was curbed by expectations of high output from the country's wind farms. * Peak wind power output is forecast at 7.5 gigawatts (GW) for Monday and Tuesday, National Grid data showed. * "Curve prices are up with oil, due to the news that Saudi and Russia (plan) to extend supply cuts to March 2018," a gas trader said. * Oil prices jumped by 2 percent on Monday after the energy ministers of the world's two biggest producers Saudi Arabia and Russia jointly agreed on the need to extend a crude oil output cut until March 2018. * Q3 2017 gas contract up by 0.15 pence to 37.50 p/therm. * Winter 2017 contract up by 0.05 pence to 44.70 p/therm. * Day-ahead gas price at the Dutch TTF hub down by 0.08 euro to 15.50 euros per megawatt hour. * Benchmark Dec-17 EU carbon contract down by 0.04 euro to 4.42 euros per tonne. * Thomson Reuters (Dusseldorf: TOC.DU - news) analyst view: http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageid=united-kingdom-gas (Reporting by Susanna Twidale; editing by Nina Chestney)