British gas prices jumped on Thursday on fears Russian gas supplies to Europe will not resume for some time and rumours of Norwegian production problems, but eased back a little later when Norwegian exports rose again. Gas for Friday rose to a high of 72 pence per therm, up more than 12 pence from day-ahead prices in the previous session, before easing to 66.50 pence, while the working days of next week surged 8 pence to 69.50 pence, off earlier highs of 71.25. “People worry now it may take a long time before Russian supply resumes. And stocks are withdrawn,” a trader said. “There’s also talk there’s some production problem in Norway.” StatoilHydro denied it was facing a production problem at its Aasgard gas field in the Norwegian Sea or elsewhere due to rough weather. Flows of fuel from Norway into eastern England fell sharply on Wednesday, according to data from British gas network operator National Grid, but shot up again around 4:30 p.m. British time. The sudden increase in flows from Norway helped push down prices late in the day but colder weather forecast for next week provided some support, a trader said. February contracts ended around 1.75 pence higher than Wednesday’s at 63.75 pence, off earlier highs of around 69 pence, while the summer 2009 contract ended down about 0.35 pence at 47.50 pence after hitting 52.30.

The shorter term price increases followed a rally on Wednesday amid uncertainties about when Russian supplies would reach Europe again and fuel stocks dropped as a result of the dispute. The row continues to disrupt supplies to many countries in continental Europe, forcing factories to shut down and leaving householders shivering in bitter winter cold. The Russian and Ukrainian prime ministers are to meet on Saturday in the latest attempt to resolve the gas row that has cut back supplies to a freezing Europe.

“The longer the dispute … drags on and the longer Europe stays without gas flows from Russia, the more concerned the market is getting,” said another trader. “With LNG stock diminishing, mid-range stocks diminishing, we are getting very susceptible to cold snaps … We are shorting to the continent.” The UK continued on Thursday to export gas to Belgium and on to the rest of Europe to help cope with the Russian supply cut.

BP’s British Sapphire LNG tanker arrived at Isle of Grain terminal on Thursday, which should help replenish part of depleted stocks for covering winter demand. In the power market, prices went up as more power plants shut down, including Heysham 2-8 nuclear power reactor. Power network operator National Grid issued warnings the UK power supply cushion for Thursday afternoon looked too tight. It put the system margin shortfall at 650 megawatts for 4 p.m.-8 p.m. British time. Baseload electricity for Friday stood at 61.50 pounds per megawatt hour, up from around 58.50 pounds of day ahead late on Wednesday. February rose more than 3 pounds to 59.25 pounds and the summer 2009 climbed 3.25 pounds to about 49.75 pounds, according to one broker.

“The prompt looks firm into next week,” said one trader.

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