U.K. natural gas rose to its highest since March 2006 following forecasts that inventories in the pipeline network may fall from a record. Within-day delivery gas rose 8.25 pence, or 12 percent, to 76 pence a therm, according to broker ICAP Plc at 10:21 a.m. London time. That’s equal to $11.42 a million British thermal units. A therm is 100,000 Btus. Supplies in Britain’s pipeline network may fall to 331.2 million cubic meters by 6 a.m. tomorrow from a record 350.1 million this morning, based on information from the Web site of National Grid Plc, the network manager, and data compiled by Bloomberg. The forecast for so-called linepack was earlier as high as 350.8 million. Average within-day prices in the U.K. gas market, the largest in the European Union, rose to a record 57.8 pence last year as British North Sea output dropped for an eighth year. Norway’s ability to meet a European shortfall in gas is limited because its fields are producing at capacity and production is expected to peak in 2011, the country’s Petroleum Directorate said. “The fields that are producing today are generally producing at maximum capacity,” Bente Nyland, head of the directorate, said in an interview today. “We can’t increase production substantially. That requires developing completely new fields, which takes several years.” February-delivery U.K. gas rose 1.55 pence to 59.75 pence. Russia and Ukraine resumed talks on a dispute over gas prices that has disrupted shipments to Europe for the second time in three years as freezing weather boosted power demand across the continent. “They should come to an agreement pretty soon,” said Christian Kleindienst, senior credit analyst at UniCredit SpA in Munich. “The stakes are too high and neither side’s bargaining position is strong enough.” A deal could take place by mid- to end-January, Kleindienst said.

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