UK gas retreats on higher Norway input, power down

LONDON Oct 23 (Reuters) - British gas prices fell early on Friday on expectations of a warmer weekend and an increase in Norwegian supply, while power prices gave up initial gains on lower demand forecasts.

Gas for Monday stood at 28.35 pence per therm ($4.72 per mmbtu) per therm by 0925 GMT, down 1.65 pence from day ahead contracts late on Thursday. November shed 0.65 pence to 33.50 pence, while December fell 1.25 pence to 38.35 pence.

"There's anticipation a lot more gas is coming from Norway," said a trader.

Another trader added: "People are wondering if supply is going to increase, going forward. This weekend is supposed to be very mild ... I think this weekend could be offset by fairly strong storage injection and (Interconnector) pipe flows as well."

The trader added exports to continental Europe were expected to rise to 28 million cubic metres on Friday, up from 20 million estimated for Thursday.

Earlier this week, day ahead contracts had bounced to above 31 pence -- the highest level since late March.

The National Grid showed the system was long early on Friday by a large margin, with Norwegian input via Langeled up to close to 60 million cubic metres early in the morning, though it was down to around 35 million.

The Berge Arzew LNG tanker remained anchored near the Isle of Grain terminal on Friday morning, after arriving on Wednesday morning, and more tankers were expected to arrive over the weekend. [ID:nLJ208165]

Overnight, New York Mercantile Exchange natural gas futures ended lower, pressured by technical selling after Wednesday's downside reversal and lingering concerns about high storage and sluggish demand. [ID:nN22403601]

Along the curves, prices were also soft, with the 2010 summer down at 0.95 pence at 39.90 pence. The 2010 summer gas had recovered to above 40 pence early this week.

In the power market, prompt prices came off following a jump at the opening as the National Grid revised downwards electricity demand for next week.

It offset an outage of Hartlepool 2 nuclear early on Friday for statutory maintenance, which took place every three years. [ID:nWLA6448]

Baseload electricity stood at 36.50 pounds per megawatt hour after opening at 39.50 pounds. Day-ahead contracts stood at 37.50 pounds late on Thursday.

November stood at 39 pounds, down from 39.25 pounds, while December fetched 39.10 pounds, down from 40.10 pounds. ($1=.6006 Pence) (Reporting by Nao Nakanishi; editing by Christopher Johnson)