UK gas system remains tight despite low demand

* Demand seen to be over 30 pct below seasonal norm

* System expected to be 3 mcm short

* Almost 1 million cubic metres of LNG could relieve system

LONDON, Aug 21 (Reuters) - British wholesale natural gas prices on Tuesday morning (NasdaqGS:TUES - news) were at similar levels as Monday afternoon as the system remained slightly undersupplied despite demand standing over 30 percent below the seasonal norm.

Gas prices for within-day as well as next day delivery were trading around 55.50 pence per therm at 0900 GMT, down around half a pence since Monday afternoon.

Power prices for baseload (24 hours) delivery on Wednesday were trading around 41.35 pounds per megawatt-hour.

Analysts said the market remained tight on the back of an undersupplied system.

"Consumption is forecast slightly up from our previous forecast and the UK system opened slightly short this morning, which are bullish factors for the NBP day-ahead gas contract," Thomson Reuters Point Carbon said.

Gas demand was expected to be 174.9 million cubic metres (mcm) on Tuesday, over 30 percent below the seasonal norm, according to National Grid (LSE: NG.L - news) .

Despite the low demand, the system was expected to be 3 mcm short, with flows seen at 171.9 mcm.

Some relief could come from rising liquefied natural gas (LNG) imports.

Almost 1 million cubic metres of LNG is expected to arrive in Britain between now and August 25.

"The increase in (gas) prices may be limited as LNG sources may provide additional gas and balance the system," Point Carbon said.

With an average fill rate of over 96 percent, Britain's gas storage sites are also providing backup.

Further out on the curve, gas prices for delivery next winter eased on the back of technical selling.

The contract rose to 67 pence per therm on Monday, their highest level since May and up 8 percent since the beginning of the month, but encountered technical resistance at that level and was sold off.

"Quite a lot of longs cashed in on gains made since the beginning of the month," one gas trader said. (Reporting by Henning Gloystein; Editing by Alison Birrane)

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