Natural gas futures initially jumped but quickly fell following the release of government inventory figures showing an increase in working gas storage that was less than what traders were expecting.

For the week ended July 17, the Energy Information Administration (EIA) reported an injection of 61 Bcf in its 10:30 a.m. EDT release, yet that included a reclassification of 7 Bcf from working gas to base gas in the Eastern Region. August futures rose to a high of $2.951 after the number was released and by 10:45 a.m. August was trading at $2.861, down 3.6 cents from Wednesday’s settlement.

Prior to the release of the data, analysts were looking for an increase in the upper 60 Bcf range. Bentek Energy’s flow model estimated 67 Bcf, and IAF Advisors was counting on a 67 Bcf increase as well. A Reuters poll of 25 traders and analysts showed an average 70 Bcf with a range of 64 Bcf to a 79 Bcf injection.

The 7 Bcf re-classification caught some traders by surprise. “It didn’t make any sense. We were looking for a build in the high 60s, 67 to 70, but the 61 Bcf was a bit of a surprise,” said a New York floor trader. “We are looking at a $2.85 to $2.95 trading range, and support below at $2.75 and resistance at $3.”

Tim Evans of Citi Futures Perspective sees a positive tone to the figure. “The DOE reported 61 Bcf in net injections for last week but noted that it had moved 7 Bcf in gas in the Eastern Region total from working gas into the base gas category. So the flow for the week was more like 68 Bcf, even though the total increased by just 61 Bcf. Either way, we consider this a constructive report, with even the 68 Bcf figure still a robust drop from the 99 Bcf level of the prior week and closer to the 54 Bcf five-year average result than it might have been.”

Inventories now stand at 2,828 Bcf and are 622 Bcf greater than last year and 89 Bcf more than the five-year average. In the East Region 41 Bcf was injected, and the West Region saw inventories increase by 8 Bcf. Stocks in the Producing Region rose by 12 Bcf.

The Producing Region salt cavern storage figure was down 1 Bcf at 304 Bcf, while the non-salt cavern figure increased 13 Bcf to 790 Bcf.