EUROPE GAS-Prices up on higher demand, shorts buying

March 6 - Dutch and British wholesale gas prices looked set for a fourth consecutive day of gains on Wednesday morning, as cooler weather increased demand and traders closed short positions.

The benchmark Dutch TTF front-month contract was up 1.12 euros at 28.30 euros per megawatt hour (MWh) by 1004 GMT, LSEG data showed.

"The TTF futures contracts have increased to the highest level in around a month, partly because of colder weather forecasts for northern Europe and partly because of speculative traders closing short positions," analysts at Energi Danmark said in their morning report.

However, the market remained well-supplied and there was no risk of any gas shortage this heating season, they added.

Europe's gas stores are currently 61.91% full, latest data from Gas Infrastructure Europe showed.

"Mostly I see coal sanctions and prolongued Freeport maintenance as supporting factors," one trader said.

Sanctions by the United States on Russian coal producer Suek in response to the death of prominent opposition leader Alexei Navalny likely meant companies that were still buying from Suek would have to switch to other sources, he added.

The front-year European API2 coal contract has gained some 16% since the end of February, in turn supporting gas prices, which compete with coal for use in power plants.

Meanwhile, one of three liquefaction units at key U.S. liquefied natural gas (LNG) export plant Freeport has been offline since late January.

U.S. gas prices rose to a three-week high on Tuesday as several producers cut back on new drilling after prices fell to a three and a half year low in February.

In Britain, the front-month contract was up 1.60 pence at 70.30 pence per therm. The day-ahead contract rose by 1.60 p at 72.80 p/therm.

Gas demand for heating was seen rising slightly for Thursday, but the latest forecasts no longer showed a previously expected dip below normal later this week, LSEG analyst Wayne Bryan said.

In the European carbon market, the benchmark contract rose 1.49 euros to 62.03 euros a metric ton. (Reporting by Nora Buli in OSLO; editing by Nina Chestney)