EUROPE GAS-Prices rise on Trump's rejection of Iranian peace proposal

LONDON, May 11 (Reuters) - Dutch and British gas contracts rose on Monday afternoon, tracking oil after the United States rejected Iran's response to a peace proposal, erasing hopes of an imminent conclusion to the Iran war.

The benchmark Dutch front-month contract at the TTF hub TFMBMc1 rose by nearly 5.3% to 46.47 euros per megawatt hour (MWh) by 1436 GMT, Intercontinental Exchange (ICE) data showed.

The British contract for June NGLNMc1 was up 5.7% at 114.28 pence per therm.

U.S. President Donald Trump's swift rejection of Iran's response to a U.S. peace proposal has fuelled concerns that the conflict will drag on and continue to paralyse shipping through the Strait of Hormuz.

"We see significant winter risks to European gas and power prices the longer the Strait of Hormuz remains constrained," BNP analysts said in a note.

With European gas storage at 35%, more than 12% below the five-year average, risks of high summer temperatures and prolonged LNG disruption in the Middle East could hamper Europe’s ability to fill storage to the target of reaching 90% by November 1, they added.

Fitch Ratings has raised its TTF price forecasts for 2026 and 2027.

"The increased TTF gas assumptions reflect the disruption to Qatari LNG flows through Hormuz. Assuming the strait reopens around July, the European gas market will remain tight throughout 2026," Fitch analysts said.

Meanwhile, a second Qatari LNG tanker is transiting the Strait of Hormuz days after the first such cargo crossed under an arrangement involving Iran and Pakistan, showing that some cargoes are managing to pass through the waterway.

At the weekend, Qatari LNG tanker Al Kharaitiyat was sailing towards the Strait of Hormuz after departing Qatar's Ras Laffan en route to Port Qasim in Pakistan, LSEG shipping data showed.

In the European carbon market, the benchmark contract CFI2Zc1 was up nearly 3% at 77.34 euros a metric ton.