An oil price rally late on Thursday, after exporter group OPEC failed to agree an increase in output, was still driving up UK gas prices on Friday, with winter 2011/12 gas rising nearly a penny to 72.90 pence per therm at round 0900 GMT -- the highest level for the contract since mid April.
"We had late gains on Brent crude yesterday. The NBP (UK gas market) is just playing catchup," one UK gas market analyst said, adding OPEC's failure to agree an increase in production had been behind the rise.
Brent crude prices have risen about 25 percent since the end of 2010, increasing interest from continental European buyers whose supply contracts are linked to oil for buying gas in the UK and pumping it through the Interconnector link to Belgium.
"In order to keep the gas within the UK the spot market has to reflect the oil index linked contracts," another UK gas market analyst said, adding low supplies from Norway were driving up spot prices too.
"There is reduced flexibility in terms of what supply can turn up due to Norwegian maintenance," he said.
"Therefore other sources such as LNG know they can charge a higher level as less supply side competition."
Once Britain's biggest supplier, Norwegian gas has played an increasingly minor role in Britain's total supply over the last few months while gas from LNG terminals has met over 40 percent of Britain's needs at times.
The price of gas for delivery on Friday rose about half a penny to 59.60 pence, while prices for next month firmed 0.20 pence to 58.60 pence.
In Britain's over-the-counter power market, rising dollar-denominated coal costs, made worse for UK generators by a weaker pound, helped push up forward prices which were already supported by strong gas.
Baseload power for next winter rose about 45 pence to 59.50 pounds per megawatt hour, while July baseload rose 10 pence to 51.25 pounds.
Prices for day-ahead baseload power delivery were around 51.10 pounds per MWh.
