Natural gas futures worked lower following the release of government storage figures that were somewhat greater than what the market was looking for.

The injection of 88 Bcf was about 4 Bcf more than market surveys and independent analyst projections, and for the week ended Aug. 15 the Energy Information Administration (EIA) reported an increase of 88 Bcf in its 10:30 a.m. EDT report. September futures fell to a low of $3.786 soon after the number was released and by 10:45 a.m. September was holding at $3.803, down 2.0 cents from Wednesday's settlement.

Prior to the release of the data, analysts were looking for a build of approximately 84 Bcf. A Reuters survey of 24 traders and analysts revealed an average increase of 83 Bcf with a range of 74-94 Bcf. United ICAP was looking for a build of 86 Bcf, and Bentek Energy, utilizing its flow model, anticipated an injection of 84 Bcf.

"This number kind of took the steam off the upside," said a New York floor trader. "[Technical] support is currently at $3.75, and below that $3.50. Resistance is at $4.00," he said.

Tim Evans of Citi Futures Perspective sees a possible supply shift. "The 88 Bcf build was more than expected and suggests a weakening of the supply-demand balance, with bearish implications for the rate of injections to follow in the weeks ahead. It's possible that supply has increased."

Inventories now stand at 2,555 Bcf and are 500 Bcf less than last year and 535 Bcf below the five-year average. In the East Region 65 Bcf was injected, and the West Region saw inventories up by 49 Bcf. Inventories in the Producing Region rose by 14 Bcf.

The Producing region salt cavern storage figure increased by 1 Bcf from the previous week to 214 Bcf, while the non-salt cavern figure rose by 12 Bcf to 592 Bcf.