Natural gas futures declined about 8 cents following word from the Energy Information Administration (EIA) that 73 Bcf was injected into underground storage for the week ending Sept. 17. While the build paled in comparison to the previous week's 103 Bcf addition, it did top both last year's date-adjusted 67 Bcf build for the week and the five-year average build of 70 Bcf.

Heading into the 10:30 a.m. EDT report October futures had added about a dime to Wednesday's close to trade at $4.068. In the minute the 73 Bcf was revealed the prompt-month contract knee-jerked to a $4.133 high before dropping lower. The October contract went on to close out Thursday at $4.019, up 5.3 cents from Wednesday's regular session close.

While futures reacted somewhat negatively to the fresh data, some market watchers saw the build as "bullish" in the context of the previous week's triple-digit injection.

"The smaller-than-expected 73 Bcf in net injections was bullish, suggesting that the prior week's 103 Bcf build was a one-off event rather than an ongoing weakening of the supply-demand balance," said Tim Evans, an analyst with Citi Futures Perspective in New York, who had been expecting an 88 Bcf build. "The build was still marginally above the 70 Bcf five-year average for the date but within what we'd consider the neutral range. Once the market goes through its weekly cycle of 'sell the news,' we think this report could signal that the market is ready for a seasonal rally."

Going into the report, industry expectations appeared to range from the high 60s Bcf to nearly 90 Bcf. Bentek Energy's flow model projected a 69 Bcf injection, while a Reuters survey had been anticipating an 80 Bcf injection.

As of Sept. 17 working gas in storage stood at 3,340 Bcf, according to EIA estimates. The build reduced the year-on-year deficit to 175 Bcf and expanded the year-on-five-year average surplus to 195 Bcf. For the week the East Region deposited 53 Bcf while the Producing and West regions added 19 Bcf and 1 Bcf, respectively.

Technical traders are waiting for the market to declare its hand. Currently, they see it trapped within a trading range that needs a definitive close one way or the other to generate momentum for a move higher or lower. "Bulls need a decisive close above $4.015-4.072 (0.618 and 0.7862 retracement of $4.144-3.806). Bears need a decisive close below $3.814-3.724 (0.618 and 0.7862 retracement of $3.610-4.144)," calculated Brian LaRose of United-ICAP.

It is his view that "until resistance can be exceeded or support can be broken natgas is stuck in neutral territory. Clear resistance and natgas has room up to $4.247-4.309. Break support and natgas has room down to $3.281-2.747," he said Thursday.

Traders on Thursday were also focusing on the development of Tropical Storm Matthew in the south-central Caribbean, which could develop into Hurricane Matthew over the next couple of days as conditions become more favorable for development.

AccuWeather.com meteorologist Meghan Evans said the system could take a couple of different paths. Some models point to the system moving westward from the Gulf of Honduras into next week, or it will first stall then move northward in the Caribbean. "More models are pointing to a conclusion that the system will move northward, over Cuba," AccuWeather.com's Evans said. "This puts Florida at risk for a direct impact from the storm by the middle of next week."

Regardless of what Matthew ends up doing, the meteorologist warned that more systems are likely to form in the Caribbean and the southwestern Atlantic over the next couple of weeks.

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