Italian natural gas prices rise as demand surges in cold weather
* Needs imports from north Europe where prices also high
* Italian gas prices: link.reuters.com/faq94v
* Italian weather: link.reuters.com/zyp94v
By Henning Gloystein and Oleg Vukmanovic
LONDON, Nov 28 (Reuters) - Italian natural gas prices shot up on Thursday as a steep increase in demand left the system undersupplied, requiring imports from northern Europe where prices were also high due to cold weather and reduced Norwegian gas flows.
Italian gas prices for delivery the next day rose by over 30 percent between Wednesday and Thursday to 40 euros ($54.30) per megawatt-hour (MWh) at 1255 GMT (1355 CET).
Italian gas grid operator Snam on Thursday forecast a gas supply shortfall, fuelling price rises.
Demand has risen from 2.25 gigawatt-hours (GWh) a day on Monday to almost 3.5 GWh a day on Thursday, Reuters data showed, driven largely by cold weather.
Average temperatures are currently around 4 degrees Celsius, compared with the seasonal norm of 8 degrees.
The steep increase in demand increased the need for Italy to import from northern Europe, where prices were also high because of Norwegian supply difficulties.
"Prices needed to rise so we could get imports from northern Europe, where there is also a bit of a shortage after Norway's exports dropped this morning," one gas trader said.
Norwegian gas exports were cut by a fifth of peak capacity on Thursday after an outage at the plant that processes gas from Royal Dutch Shell's giant Ormen Lange field.
Traders said that regulatory caps on withdrawals from gas storage sites, designed to preserve gas stockpiles for later in the winter, had also pushed up prices.
Supplies from Algeria, Italy's main gas provider behind Russia, remained steady, while Libyan supplies were interrupted as a result of political instability.
($1 = 0.7367 euros) (editing by Jane Baird)
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