September natural gas futures rose as traders cited geopolitically derived strength in crude oil and hints of tropical development by a leading forecaster as giving the market a late-week lift. September natural gas rose 27 cents to $9.389 and the October contract tacked on 27 cents as well to finish at $9.494. September crude oil rose $1.02 to $125.10/bbl after trading as high as $128.50.

“It looks like Iranian nuclear developments and a statement by [meteorologist] Joe Bastardi have worked through the natural gas market,” said Tom Saal of Commercial Brokerage in Miami.

Oil and by extension natural gas got a boost from the geopolitical front. According to a Bloomberg report, Israeli Deputy Prime Minister Shaul Mofaz said Iran is on a path toward a “major breakthrough” in its “unacceptable” nuclear weapons program. Mofaz said “all the options are on the table,” thus enhancing speculation that the U.S. or Israel may attack Iran. Iranian President Mahmoud Ahmadinejad said the country will “resist with force” any outside efforts to slow its nuclear program.

Hurricane forecaster Bastardi of has raised the possibility of Gulf of Mexico tropical activity. “The trough going through the Northeast the next couple of days will leave, but a piece will break off southwest for the Gulf Coast this weekend. This could lower pressures in the northern Gulf with a system trying to come west under a building ridge,” Bastardi said on his weather blog. He added that storms from this feature should develop over the weekend near the Louisiana coast, then head back west. “A long shot, but nothing I want to get caught napping on. You may have noticed very little attention to the northern Gulf system a couple of days ago. That was because I felt there was no chance for it to develop. This, however, is something that still is a few days away, and has caught my eye,” the forecaster said.

Tom Saal, in his work with Market Profile, correctly diagnosed the day’s advance. In a morning note to clients he said he expected the market to test Thursday’s “value area” at $9.101 to $9.227. The market not only tested the value area but blew right past it. September traded as high as $9.460 in Globex electronic trading before easing near the close. Going into Friday’s trading Saal said the market had formed a “neutral week” with no firm direction. With Friday’s strong close, indications are that in the short run the market may continue higher.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.