EUROPE GAS-Prices rise amid Ukraine concerns, strong demand

LONDON, March 3 (Reuters) - Dutch and British wholesale gas prices rose on Monday morning as concerns over a peace deal for Ukraine and strong demand supported the market.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was up 2.19 euros at 46.50 euros per megawatt hour (MWh), or $14.19/mmBtu, by 0914 GMT, according to LSEG data.

The Dutch May contract TRNLTTFMc2 was up 2.15 euros at 46.80 euros/MWh.

In the British market, the day-ahead contract TRGBNBPD1 was up 3.80 pence at 111.30 p/therm.

Uncertainty about a Ukraine peace deal loomed over the market after U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy clashed during talks in the White House late last week.

"It is no doubt that energy markets this morning are showing concern," analysts at Auxilione said in a daily research note.

"Europe (or parts of it at least) will now try and find a solution for peace and seek U.S. approval. Some European countries have already expressed their concern at this," the analysts said, adding prices are expected to remain volatile on any news.

Fundamentally, gas demand has also remained strong, and prices are still rebounding after falling from a two-year high of 59.27 euros/MWh on February 11.

"European gas demand surged by 20% in February, its strongest year-on-year (y-o-y) increase since April 2021, when the gas market was still recovering from the COVID lockdowns," said Greg Molnar, gas analyst at the International Energy Agency

"The strongest contributor was the power sector where gas burn soared by a staggering 60% y-o-y. And once again, this was primarily driven by lower wind output, which dropped by almost 40% y-o-y," he said on a post on LinkedIn.

In the European carbon market CFI2Zc1, the benchmark contract was up 1.07 euro at 72.07 euros a metric ton.