Natural gas futures rose and then quickly retreated Thursday morning following the release of government storage figures showing inventory drawdowns somewhat greater than what traders were looking for. For the week ended March 6, the Energy Information Administration (EIA) in its 10:30 a.m. EST release reported a decrease of 198 Bcf.

April futures rose to a high of $2.864 after the number was released and by 10:45 EST April was trading at $2.824, unchanged from Wednesday’s settlement.

Prior to the release of the data, analysts were looking for a decrease in the low 190 Bcf range. A Reuters survey of 23 traders and analysts showed an average 191 Bcf with a range of 171 Bcf to 201 Bcf. Coming in right on the money were analysts at IAF Advisors, who were looking for a 198 Bcf pull, matching industry consultant Bentek Energy.

“We were looking for a 191 Bcf draw, but I had seen anywhere from the low 170s to 211 Bcf or so,” said a New York floor trader. “It looks like traders were waiting for a move to the upside like this to sell. They took advantage of the rally and just hit it. There is no indication that the market can hold higher prices. If it couldn’t make $3.00 with this number, what is it going to take?”

Others see a more bullish tone to the report.

“The 198 Bcf drop in storage was near the top end of the range of market expectations, a bullish surprise,” said Tim Evans of Citi Futures Perspective. “As a second consecutive bullish miss, this suggests that the background supply/demand balance may be somewhat tighter than anticipated.

“There’s not a great deal of seasonal heating demand still ahead of the market, but we continue to see potential for a short covering rally to the $3.10-3.20 area and today’s data gives the market a push in that direction.”

Inventories now stand at 1,512 Bcf and are 483 Bcf greater than last year and 225 Bcf below the five-year average. In the East Region 104 Bcf were withdrawn, and the West Region saw inventories decrease by 16 Bcf. Stocks in the Producing Region declined by 78 Bcf.

The Producing region salt cavern storage figure fell by 28 Bcf from the previous week to 108 Bcf, while the nonsalt cavern figure dropped 49 Bcf to 447 Bcf.