EUROPE GAS-Prices ease but LNG flows remain concern as Middle East crisis continues

OSLO, March 18 (Reuters) - Benchmark Dutch wholesale gas prices were slightly weaker on Wednesday morning, in line with movements in the oil market, with the Strait of Hormuz and flows of liquefied natural gas (LNG) still the main price drivers.

The benchmark Dutch front-month contract at the TTF hub TFMBMc1 eased by 0.85 euro to 50.71 euros per megawatt hour (MWh) by 0909 GMT, ICE data showed.

The British front-month contract NGLNMc1 was down 2.20 pence at 129.00 pence per therm.

"With slightly lower oil prices this morning, the TTF front-month is trading marginally lower," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management (GRM), adding that oil prices and the news flow around the situation in the Middle East will remain the main drivers.

Oil prices eased on Wednesday after crude exports resumed from Iraq's Kirkuk fields to Turkey's Ceyhan port via pipeline, providing modest relief to global markets concerned about supplies from the Middle East, with no signs of a de-escalation of the Iran conflict.

"What the European gas market will be watching particularly closely is the evolution of LNG flows to Europe in the coming weeks," said analysts at Engie EnergyScan.

The extent of cargo diversions from Europe to Asia will be key in determining the direction of European gas prices, they added.

The Iran conflict has shut down LNG production and exports from Qatar, accounting for about 20% of global supply, most of which typically delivers to clients in Asia. The loss of these volumes have seen several cargoes previously headed to Europe change direction.

In the European carbon market, the benchmark contract CFI2Zc1 was down 0.30 euro at 66.35 euros a metric ton.

On Tuesday, prices dropped as much 5% to their lowest since April last year after the European Commission President said the bloc would consider making more carbon emissions permits available to help curb high energy prices.