The EIA’s Weekly Natural Gas Storage Report released this morning showed a net decline of 95 Bcf from the previous week – a larger withdrawal than analysts expected – which is usually a bullish market indicator, but the prompt month NYMEX natural gas futures contract had declined slightly by mid-day.

“Stocks were 642 Bcf less than last year at this time and 61 Bcf above the 5-year average of 1,720 Bcf. In the East Region, stocks were 41 Bcf below the 5-year average following net withdrawals of 73 Bcf,” according to the EIA report.

Cool weather contributed to the hearty storage withdrawal, as natural gas is used for heating many commercial and residential structures. Although the stock decline was larger than analyst expectations, the market had apparently already priced in the weather-related supply impact.

It appears US Henry Hub natural gas will have difficulty breaking above the psychological $4.00/MMBtu threshold given record high production levels and the onset of mild spring weather, which typically limits heating and air conditioning demand.