EUROPE GAS-Prices close at two-month low as market monitors Ukraine peace talks

Adds closing prices, trader comment

LONDON, Feb 25 (Reuters) - Dutch wholesale gas prices ended Tuesday trading with significant drop amid a wide sell-off as the market awaited developments from U.S.-led talks to end the war in Ukraine.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 closed down 2.31 euro, or almost 5%, at 43.99 euros per megawatt hour (MWh), or $13.53 /mmBtu, its lowest since December 20, LSEG data showed

The Dutch day-ahead contract TRNLTTFD1 was fell 3.5 euros, or 7.42% to 43.70 euros/MWh, also the lowest level since December 20.

In Britain the day-ahead contract TRGBNBPD1 lost 7.16 pence, or 6.32%, to close at 106.07 pence per therm, its lowest level since December 17.

U.S. Middle East envoy Steve Witkoff is delaying a trip to the Middle East by a few days due to U.S. diplomatic efforts on Russia and Ukraine, Axios reported on Tuesday, citing a source.

"Market is very long and people are terrified of prices falling further in case of potential ceasefire," said a trading source.

In the European carbon market CFI2Zc1, the benchmark contract was down 1.88 euro at 71.78 euros a metric ton.