--Natural gas up over 4% as traders eye small storage increase --Technical factors also push prices above $2.90 for first time in a month --Natural gas recently up 11.7c to $2.929/MMBtu By Jerry A. DiColo NEW YORK--Natural gas futures surged Tuesday, adding to Monday's strong rally on hopes of lower storage increases and sending prices to the highest level in over a month. Natural gas for October delivery rose 11.7 cents, or 4.1%, to recently trade at $2.929 a million British thermal units on the New York Mercantile Exchange after trading as high as $2.952 earlier in the session. Gas rose Tuesday on a combination of technical trading factors as well as signs that this week's increase in U.S. stockpiles will remain low due to production cuts caused by Hurricane Isaac. Gene McGillian, a broker and analyst at Tradition Energy, said prices are taking off after breaking above the 200-day moving average of $2.647/MMBtu. The 100-day moving average, at $2.655/MMBtu, has also "crossed" above the 200-day average, which many traders take as a sign prices will move higher. "The market has turned around," said Mr. McGillian, who also noted that the storage injection will likely be affected by the hurricane. "Today you are getting some technical buying after the market jumped through last week's highs." Natural-gas futures had been on a steady slump since highs above $3/MMBtu in early August, battered by concerns that high prices would reduce demand from electric utilities. But after dropping to a low of nearly $2.60 in late August, prices have aimed higher. Hurricane Isaac shut down gas production in the Gulf of Mexico, keeping storage increases in check. FirstEnergy Capital said Tuesday that August gas injections are on pace to come in at the second-lowest ever for the month. Meanwhile, many traders, no longer fearful that inventories will reach capacity later this year, are expecting a cooler winter than last year, which should help boost fuel usage. Still, some remain cautious that about the latest rally. Jim Ritterbusch, head of energy-trading advisor Ritterbusch and Associates, said Tuesday there are few factors "capable of sustaining price advances," as forecasts over the next few weeks call for cooler temperatures that should lower gas-fired utility demand as air conditioning usage drops. Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $2.82/MMBtu, according to IntercontinentalExchange, compared with Monday's average of $2.6609/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $2.98/MMBtu, down from $2.7915/MMBtu. Write to Jerry A. DiColo at jerry.dicolo@dowjones.com

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