The NYMEX May natural gas futures contract slid 5.3 cents following the release of a storage report that exceeded analyst expectations.
But as of 10:43 am EDT (1443 GMT), the contract was trading at $2.124/MMBtu, down 1.7 cents from Wednesday's settlement.
The US Energy Information Administration on Thursday estimated a build to natural gas stocks of 42 Bcf for the week that ended Friday, which was above analyst expectations of a build between 33 Bcf and 37 Bcf. EIA reported a 29-Bcf withdrawal in the corresponding week of 2011 and a five-year-average injection of 8 Bcf.
The report was "higher than expected and now the market's acting accordingly," said Tom Saal, a senior vice president of energy trading with Hencorp Becstone Futures.
"I'm surprised we're not down more," said PFGBest analyst Phil Flynn. "We seem to get more bearish news everyday and there doesn't see to be any bullish news at all."
Thursday's storage data, along with mild weather forecasts and production levels which do not appear to be slowing despite the low prices, will continue to weigh on the market, Flynn said.
Flynn put support at $2.04/MMBtu and resistance at $2.17/MMBtu.
The contract has been trading between $2.088/MMBtu and $2.159/MMBtu.
