* Goldman says LNG market to tighten * Brent crude rises above $114 per barrel July 7 (Reuters) - British wholesale gas prices rose on Thursday morning after U.S. bank Goldman Sachs forecast a tighter liquefied natural gas (LNG) market, while bullish oil contracts boosted buying, traders said. Investment bank Goldman Sachs said in a note on Thursday morning that it expected the global LNG market to tighten and European spot gas prices to reconnect with oil-indexed prices, sending a bullish signal to the UK gas market. "We expect global LNG demand to outpace supply, and test effective LNG production capacity. Hence, we maintain our view that European spot and oil-indexed natural gas prices will re-connect on a sustainable basis this year," the bank said. The UK gas market is increasingly dependent on LNG imports as domestic supplies decline and traders are uncertain about how much LNG supply will be re-directed in the short term to Japan, where some of the nuclear capacity lost following the March tsunami is being replaced by higher gas consumption. "(The market) could be tight this summer. We have obviously been seeing a bit less arrive in the UK recently, but it's difficult to know exactly what is happening with Japanese/Asian demand," one UK energy trader said. Gas for delivery in winter 2011/12 rose to 72.00 pence per therm on Thursday morning, a fresh three-week high and up 0.80 pence from the previous session's closing price. Brent crude oil also rose on Thursday, climbing above $114 per barrel on the back of a higher-than-expected drop in U.S. crude stocks. UK gas prices are indirectly affected by oil prices because stronger oil means that continental European gas suppliers may buy more gas in the UK over coming months as their oil-indexed supplies rise in price. The prompt market also traded higher on Thursday as the gas system was undersupplied in the morning on the back of a drop in input from LNG terminals. Gas flows from the Isle of Grain and South Hook terminals fell by around 20 million cubic metres (mcm), leaving the system around 4 mcm undersupplied. Gas for delivery on Thursday rose to 56.70 pence, up 0.30 pence from the previous session, while Friday gas added 0.55 pence to 56.65 pence. In Britain's over-the-counter power market spot prices fell slightly on the back of the usual drop in power demand ahead of the weekend, but a series of nuclear reactor outages kept supply margins relatively tight. Baseload power for day-ahead power fell to 49.30 pounds per megawatt-hour, down 20 pence from the previous session. But around 3 gigawatts (GW) of nuclear power capacity were still offline on Thursday, keeping power prices near the 40-pound mark. (Reporting by Karolin Schaps, editing by Anthony Barker) (karolin.schaps@thomsonreuters.com)(+44 207 542 6622)(Reuters Messaging: karolin.schaps.reuters.com@reuters.net)) GAS-Please click on the following for information about UK and Belgian prices, field maintenance and field start-ups. UK natural gas prices <0#NBPGAS-RTR> Belgian natural gas prices <0#ZEEGAS-RTR> North Sea field start-ups North Sea field maintenance POWER UK: baseload prices <0#ELBUK-RTR>, outages report FRANCE: baseload prices <0#ELBFR-RTR>, peak <0#ELPFR-RTR> market report , Powernext <0#POWERNEXT>, Spectron baseload <0#FRBSLD-SPC>, off peak <0#FROFPK-SPC>, peak <0#FRPEAK-SPC> nuclear outages: report , offline percentage EL-FROUTAGE-PC, offline capacity (MW) EL-FROUTAGE-MW GERMANY: baseload prices <0#ELBDE-RTR>, peak <0#ELPDE-RTR> outages , report SWITZERLAND: outages , reservoir levels NORDIC: report EU CARBON PRICES SPEEDGUIDE:

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