EUROPE GAS-Prices fall as Trump postpones strikes on Iran power plants

OSLO, March 23 (Reuters) - The European benchmark gas contract fell sharply on Monday after U.S. President Donald Trump said he would postpone strikes on Iranian power plants and energy infrastructure and that a deal with Iran could be reached "within five days or sooner".

The benchmark Dutch front-month contract at the TTF hub TFMBMc1 was down 4.14 at 55.12 euros per megawatt hour (MWh) by 1322 GMT, data from the Intercontinental Exchange showed.

It had traded as high as 63.15 euros/MWh earlier in the day and fell to an intraday low of 53.74 euros/MWh.

The British contract for April NGLNMc1 was 12.72 pence down at 138.38 pence/therm, having traded in the range of 132.79 to 159.47 p/therm on Monday.

"Markets have been taken on a wild ride, as investors have swung from deep pessimism to giddy optimism about the trajectory of the war with Iran," said Susannah Streeter, chief investment strategist at UK-based brokerage Wealth Club.

While clinging to President Trump's words is fraught with risks, given how hopes have already risen and then been dashed over the last four weeks, sentiment has turned more upbeat for now, she added.

Prices had opened higher after President Trump on Saturday threatened to "obliterate" Iran's power plants if it did not fully reopen the Strait of Hormuz within 48 hours. In turn, Iran warned it could destroy critical infrastructure and energy facilities in the Middle East.

The latest turn of events does little to change the outlook for a much tighter market in 2027, given the destruction of 17% of Qatar's LNG production for the next 3-5 years, said Arne Lohmann Rasmussen, chief analyst at Global Risk Management.

"Even if the war ends tomorrow, it will have serious long-term ramifications for the LNG outlook," he added, highlighting that contracts for the next years have risen as well.

Analysts at Rabobank on Monday raised their TTF price forecast and now see 50 euros/MWh for 2026 and 42 euros/MWh for 2027, to reflect a prolonged closure of the Strait and a multi-year curtailment of Qatari LNG flows following strikes on its Ras Laffan terminal.

"We also see risk of further attacks on energy infrastructure in the Gulf inflicting lasting supply curtailments, posing significant upside price risk to our natural gas and crude oil views," Rabobank said.

Meanwhile, LNG supply this year is expected to remain around 2025 levels, at 443 million tons, they forecast, as U.S. additions can no longer offset outages across the Middle East and North Africa.

EU gas storage sites were last 28.5% full, compared with around 33.8% at the same time last year, Gas Infrastructure Europe data showed.

In the European carbon market, the benchmark contract CFI2Zc1 was up 1.73 euro at 69.39 euros a metric ton, reversing losses earlier in the day.