UK gas prices jump as cold forecasts snap bearish streak

(Reuters) - British wholesale gas prices snapped a months-long bearish spell on Tuesday with week-ahead prices jumping 13 percent on forecasts for colder temperatures that should bolster demand for the heating fuel. The most traded gas contracts rose by between seven and 13 percent from pre-Christmas holiday levels despite a current glut of gas and low demand. Day-ahead gas for Wednesday delivery was up 7.26 percent or 2.26 pence to 33.40 pence per therm at 1249 GMT, while gas for working days next week jumped 13.19 percent to 34.75 p/therm. "[The forecast provides] a very different picture to what we were seeing before Christmas," a trader at a top European utility said, referring to mild outlooks which weighed on prices. Local distribution zone consumption forecasts for next week are seen up by 30-40 million cubic metres (mcm) per day compared with pre-Christmas levels, according to analysts at Thomson Reuters Point Carbon. Britain's Met Office stopped short of predicting a chilly January, however. "Overall, temperatures are likely to be in the near to just above average category, although there remains a low probability of a more prolonged spell of colder weather," the Met Office said. The price rebound could partly be due to an overdone pre-Christmas selloff, one analyst said. A trader said the price moves were too big to ignore even if the fundamentals did not explain the gains. Britain's gas network was oversupplied by around 8 mcm/day, National Grid data showed. Flows through the Langeled pipeline, Norway's main export route to Britain, were at 60 mcm versus 35 mcm/day during the Christmas break. In the Netherlands, the day-ahead gas price at the TTF hub was up 0.43 euros at 14.85 euros per megawatt hour. In Europe's carbon market, the benchmark EU Allowance (EUA) were down 0.03 euros at 8.35 euros a tonne. (Reporting by Oleg Vukmanovic in Milan, Sarah McFarlane in London and Nerijus Adomaitis in Oslo, Editing by Louise Heavens and Jason Neely)