NEW YORK (

TheStreet

) -- Natural gas storage levels rose last week, as warmer temperatures resulted in the season's first increase in storage levels a little earlier than usual. Higher storage levels weighed on natural gas futures, pulling the April contract down by 3% Thursday.

In a recent interview with Platts, John Gerdes, an energy analyst with SunTrust Robinson Humphrey, said storage levels usually fall through the end of May but that last week's milder temperatures dented heating demand. Gerdes also said the rising rig count is contributing to a supply rebound.

On Thursday, the Energy Information Administration said underground stocks in the lower 48 states grew by 11 billion cubic feet to 1.626 trillion cubic feet, which was in line with the natural gas injection to storage levels of 9 billion to 13 billion cubic feet that analysts polled by Platts had been expecting.

The administration said total storage levels are 1.7% below year-ago levels, though remain 8% higher compared to the five-year average.

Natural gas futures traded lower after the release and the April delivery contract fell to an intraday low of $3.94 -- a record low for the April contract, according to

The Associated Press

.

The May crude oil contract lost 8 cents, or 0.1%, to settle at $80.53 after trading as high as $81.48. Dollar weakness was the primary support behind crude prices but the greenback reversed, pressuring dollar-priced commodities.

The dollar was last up by 0.2% against a basket of currencies, while

stocks got a lift after a reported drop in last week's

initial jobless claims and as

Federal Reserve

Chairman Ben Bernanke said economic conditions still warrant accommodative Fed policies.

The

U.S. Oil Fund

(USO) - Get Report

ETF rose 0.1%, while the

U.S. Natural Gas Fund

(UNG) - Get Report

slid 3%.

Major energy stocks weakened with the NYSE Arca Oil index down 1.4%, and the Philadelphia Oil Services index off by 2.5%

"We continue to advocate a cautious, selective approach toward investing in oil service stocks -- particularly toward those with meaningful North American natural gas exposure," said Barclays Capital analyst James Crandell in a recent note on the sector. "Our investment stance on the group has consistently emphasized international and deepwater exposure and we reiterate that stance today. We believe that international E&P spending will grow more rapidly and be less cyclical than E&P spending in North America."

On the Dow, shares of

Exxon Mobil

(XOM) - Get Report

and

Chevron

(CVX) - Get Report

slumped 0.2% and 0.3%, respectively.

Servicing giant

Schlumberger

(SLB) - Get Report

announced plans late Wednesday to buy

Geoservices

, a French oilfield services firm, for just over $1 billion from a private-equity outfit. In a release, Schlumberger said Geoservices' expertise in "mud logging" technology will complement Schlumberger's drilling systems. Schlumberger shares, however, were off by $1.45, or 2.3%, at $60.76 by the end of Thursday's session.

Elsewhere on the Nymex, both the May heating oil contract and the May gasoline contract slipped 0.1%, to settle at $2.08 a gallon and $2.22 a gallon, respectively.

-- Written by Sung Moss and Melinda Peer in New York

.