* Front month just above January's 10-year low * Mild weather on tap for most of nation * US crude futures slide more than $1/barrel early * Coming Up: API oil data Tuesday, EIA oil data Wednesday NEW YORK, March 12 (Reuters) - U.S. natural gas futures were about 5 cents, or more than 2 percent, lower early Monday, but still above recent 10-year lows, as weaker crude, mild weather and bloated inventories all weighed on sentiment. Front-month April natural gas futures on the New York Mercantile Exchange were at $2.27 per million British thermal units in early activity, down 5.4 cents, or a little over 2 percent. Last week the contract slid to $2.235, just above the January low of $2.231, the lowest price for a front month since March 2002. STORAGE A PROBLEM FOR PRICES Last week's gas storage report from the U.S. Energy Information Administration showed total domestic inventories fell by 80 billion cubic feet to 2.433 trillion cubic feet, still at record highs for this time of year, and more than 700 bcf, or 40 percent, above both last year and the five-year average level. (Storage graphic: link.reuters.com/mup44s) Early withdrawal estimates for this week's EIA report range from 55 bcf to 72 bcf versus last year's drop of 60 bcf and the five-year average decline of 79 bcf for that week. With no extreme cold on the horizon, stocks are likely to end winter at an all-time high of 2.2 tcf, well above the previous record of 2.148 tcf set in 1983. The cushion could also spell trouble for prices late in the summer stock-building season if storage caverns fill to capacity and force more supply into the market. OUTAGES, CUTS COULD HELP TIGHTEN MARKET Nuclear plant outages were running at about 19,600 megawatts, or 20 percent, on Monday, up from 14,500 MW out a year ago and a five-year outage rate of about 14,700 MW. Traders said the outages could add more than 1 bcf to daily gas demand. And planned output cuts by producers could trim 1 bcf per day or more from flowing supply. Relatively cheap gas has also drawn more industrial use and prompted additional utility fuel switching away from more expensive coal. But with production still running at or near all-time highs, few traders expect much upside in prices in the near term. MORE FUNDAMENTALS The National Weather Service six to 10-day outlook issued on Sunday called for above or much-above-normal readings for about the eastern two-thirds of the nation and below-normal readings only in the West. Baker Hughes drilling data last week showed the gas-directed rig count fell for a ninth straight week to a 32-month low of 670. The steady drop in gas-directed drilling has stirred talk that low prices might finally slow output. (Rig graphic: r.reuters.com/dyb62s) Analysts agree it can take months for a slowdown in drilling to translate into lower production, noting the producer shift in spending to higher-value oil and gas liquids plays still produces plenty of associated gas that partly offsets any reductions in dry gas output. A recent Bernstein report said the gas-directed rig count would have to drop to about 600 before it would be comfortable forecasting flat to falling production. Most analysts, noting it will be difficult to balance the gas market without serious production cuts, do not expect any major slowdown in gas output until late this year.

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