Nordic power-Forwards up, buying offsets weather f'cast

OSLO Feb 15 (Reuters) - Forward Nordic power prices <0#ENOALL:> rose slightly on Wednesday as milder weather forecasts were offset by some market participants buying contracts that have become significantly cheaper over the past week.

The benchmark contract on the pan-Nordic Nasdaq OMX Commodities exchange, the second-quarter 2012, rose 0.29 percent to 34.30 euros at 0951 GMT.

The contract is down some 12 percent since the two-month high of 38.80 euros it set on Feb. 7.

The front-month contract, the March 2012, was up 0.13 percent to 37.25 euros.

A trader said the underlying market trend was strong, despite the very wet and mild weather forecasts.

"Some players have stopped selling and now there are one or two big players who see now as a good time to buy, to get 1-2 euros of profit ... We expect a strong afternoon."

Nuclear production in the region, which had been difficult with a little over half of Sweden's nuclear capacity in use earlier this winter, had improved and is now up to 82 percent of installed capacity, according to the trader.

"If the cold weather returns, it could get ugly again in the short-term, but the probability of that is low," he said.

PRICE DRIVERS

* Spot price expectations: the trader expected the spot price for Thursday to be around 41-42 euros later today, due to much lower wind power production in the region and in Germany, with whom the Nordics trade power.

* Weather: forecaster Georg Mueller at Point Carbon, a Thomson Reuters company, said there were no fundamental changes in the forecasts this morning, with temperatures near or slightly above normal and precipitation above normal.

* Hydro balance: the total amount of snow and water available across Norway, Sweden and Finland 15 days from now will be 10.7 terawatt hours above normal, according to Point Carbon.

* Oil: a barrel of Brent crude was worth 118.14 dollars at 1009 GMT, up 0.67 percent.

* Carbon: The front-year European Union Allowances permit was up 1.85 percent to 8.26 euros.

* Nuclear: The Oskarshamn 1 and Ringhals 2 reactors in Sweden remain offline and are not expected to be back before the middle of next month.

* Coal: the short-run marginal cost of coal is expected to be 40.0 euros per megawatt hours in the second quarter of 2012, up 0.5 euros compared with yesterday's close, according to Point Carbon. (Reporting by Gwladys Fouche; Editing by Alison Birrane)