--Natural-gas up modestly on storm worries --Futures recently gain 2.1c to $2.823/MMBtu --Tropical Storm Isaac seen strengthening to hurricane on Tuesday, NHC By Jerry A. DiColo NEW YORK--Natural gas futures aimed higher Friday as investors kept watch on Tropical Storm Isaac and the potential for lost natural-gas production as the storm heads towards the Gulf of Mexico. Natural gas for September delivery rose 2.1 cents, or 0.8%, to recently trade at $2.823 a million British thermal units on the New York Mercantile Exchange. Tropical Storm Isaac is on track to cross Cuba and head into the Gulf of Mexico by Monday, according to forecasts from the National Hurricane Center, strengthening into a hurricane by early Tuesday morning as it heads northwest toward Alabama and the Florida panhandle. If the storm stays on the current path, it's likely to cause at least temporary disruptions to oil and gas drilling operations, which are mostly located off the coasts of Texas and Louisiana. "I would expect to see producing companies starting to take precautionary measures and evacuating some of the rigs," said Dominick Chirichella, an analyst at the Energy Management Institute, in a research report. Any extended outages could create some short-term supply issues and lead to rising prices, though the potential disruption is likely much smaller than in years past, when a much larger percentage of U.S. gas production was located offshore. In 2005, daily output from the Gulf was 10.1 billion cubic feet, or 15.4% of total U.S. output. Currently the U.S. gets 4.3 bcf a day of gas from the Gulf, or 5.2% of the nation's output. Natural gas prices have stalled near $2.80/MMBtu, in a range that is just above the 200-day moving average, a key level of technical support. Warmer-than-normal weather across the U.S. over the past two months led to a price rally as utilities burned more natural gas to keep up with electricity demand from air conditioning. But over the past two weeks, hot weather has moderated. On Thursday, weekly government data showed a larger-than-anticipated increase in natural-gas stockpiles, which initially battered prices before storm threats surfaced. Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $2.8025/MMBtu, according to IntercontinentalExchange, compared with Thursday's average of $2.813/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $2.75/MMBtu, down from $2.9263/MMBtu. Write to Jerry A. DiColo at jerry.dicolo@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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