UK GAS-Prices rise on higher consumption, Dutch production concern

* Demand above seasonal norm

* Immediate delivery gas up 0.25 pence to 40.25 p/therm

Oct (HKSE: 3366-OL.HK - news) 7 (Reuters) - British wholesale gas prices rose on Wednesday morning due to higher consumption levels as heating demand started to pick up and on concerns that Dutch gas production will be cut further.

Gas for immediate delivery rose by 0.25 pence to 40.25 per therm at 0737 GMT, while gas for next-day delivery was 0.15 pence higher at 40.30 p/therm.

"Demand seems to be ticking up as we have entered the winter gas season which is impacting the prompt, but there are also still concerns in the market about yesterday's Dutch parliament call to cut Groningen production more," a UK gas trader said.

Demand was forecast to be 220 million cubic metres (mcm) on Wednesday, above the seasonal norm of 192.6 mcm, National Grid (LSE: NG.L - news) data showed, as temperatures have started to fall and heating demand has picked up.

However, the UK gas system was still slightly oversupplied by 3 million cubic metres (mcm), National Grid data showed.

The oversupply is due to the resumption of flows through the BBL pipeline from the Netherlands, with Russian gas delivered by Gazprom to Centrica (LSE: CNA.L - news) accounting for most of that.

Supply from the UK Continental Shelf also increased but exports to Europe through the InterconnectorUK were higher.

In the fourth quarter, there should be better supply from Norway and domestic production for Britain than last year, but the volume of liquefied natural gas imports is uncertain for north-west Europe, said analysts at UK-based consultancy Energy Aspects.

"Despite some fairly good supply, our expectations of a colder quarter year-on-year means demand is expected to be higher as well by 0.78 bcm from non-power end user demand," they added.

Gas for delivery in the first quarter rose by 0.95 pence to 43.50 p/therm.

In the Netherlands, the day-ahead gas price at the TTF hub was up 0.25 euros at 18.40 euros per megawatt hour, due to rising gas consumption in northwest Europe.

Exports from Britain to continental Europe via InterconnectorUK were higher to help meet the demand for gas.

TTF prices rose on Tuesday after the Dutch parliament approved a motion calling on the government to lower gas production from the Groningen gas field further.

In Europe's carbon market, the benchmark EU Allowance (EUA) was flat at 8.22 euros a tonne. (Reporting by Nina Chestney, editing by Louise Heavens)