The NBP Winter 2011-2012 gas contract was around 70.70 pence per therm (p/th), down from 71.85 p/th on Tuesday afternoon and a Wednesday opening of 72.30 p/th.

Traders said that forward gas prices had encountered heavy technical resistance just above 72 p/th and that this pattern had been similar in benchmark forward contracts of the power and coal markets.

The German 2012 basloead (24 hours delivery) contract failed to rise to and sustain itself above 58 euros per megawatt-hour (MWh), and the API2 2012 coal futures contract hit resistance it couldn't break at $130 per tonne.

"In the volatile ups and downs we have seen during the past two weeks, traders are closely monitoring related markets, and that means that power, gas and coal markets are closely alligned at the moment as they are the main price factors in the power generation complex," one utility trader said.

On the spot market below seasonal demand kept prices at bay.

Gas for next day delivery were at 56.25 p/th around 1000 GMT, down 0.1 p/th fomr the same time the previous day.

Prices for August were dow 0.15 p/th to around 56.10 p/th.

"The flatness of the spot to the prompt (August) is once again expected to limit further storage injections," Inenco said in a research note.

The UK power market mirrored its gas sector, with prices for baseload delivery on Thursday trading at 49.50 pounds per MWh on Wednesday morning, down 10 pence on the previous day.

Copyright Reuters, 2011