EUROPE POWER-Forward prices post slight gains, tracking higher gas costs

PARIS, March 6 (Reuters) - European year-ahead contracts rose in early trading, tracking higher oil and gas prices as the Iran conflict grows. NG/EUO/R

• The energy price jolt from this week's Middle East shock has left Europe fretting about an economic hit akin to the invasion of Ukraine four years ago. But initial fears may be overdone if futures markets prove accurate.

• German year-ahead baseload TRDEBYc1 added 1.8% to 89.60 euros ($103.72) per megawatt hour by 0952 GMT.

• The equivalent French contract TRFRBYc1 was up 0.5% at 56.1 euros/MWh.

• U.S. President Donald Trump told Reuters in an exclusive interview that the U.S. military operation in Iran was his priority and that he was not concerned about rising U.S. gas prices.

• Kuwait and the United Arab Emirates are the Gulf oil producers who will be next to reduce output if they cannot export crude through the Strait of Hormuz due to the Iran crisis, as storage tanks fill up, according to analysts, traders and sources.

• The European carbon market's benchmark contract CFI2Zc1 rose 0.3% to 70.59 euros a metric ton.

• The European Commission confirmed a formal review of Italy's domestic measure subsidizing ETS costs for consumers.

• "Rather than swiftly rejecting the proposal and restoring market confidence, the review introduces an additional layer of uncertainty for the carbon market," said analysts at Engie's EnergyScan.

• On the spot side, drops in wind supply were expected to outweigh drops in demand, suggesting the untraded German and French contracts would rise. TRDEBD3TRFRBD3

• German wind power generation is forecast to drop by 2.8 gigawatts to 4.6 GW on Monday while French output is projected to fall by 1.9 GW to 1.6 GW, LSEG data showed.

• Power demand in Germany was forecast to slide by 1.2 GW to 55.5 GW on Monday while French demand was expected to dip by 880 megawatts at 49.7 GW, LSEG data showed.

($1 = 0.8639 euros)