* Front month contract slides for 5th time in six days * Milder weather on tap for consuming regions * Inventory data, production data both supportive * Coming Up: Baker Hughes gas drilling rig data Friday (Adds cash prices, updates throughout) By Eileen Houlihan NEW YORK, June 1 (Reuters) - U.S. natural gas futures slid about 3 percent early Friday, pressured for a fifth time in six sessions after a slight reprieve on Thursday. Traders said weekly inventory and monthly production data were both modestly supportive on Thursday, but forecasts for moderating weather that should curb cooling demand added weight to the downside. Front-month July natural gas futures on the New York Mercantile Exchange were at $2.349 per million British thermal units in early trade, down 7.3 cents, or just over 3 percent. The nearby contract eked out less than a 1 cent gain on Thursday after falling nearly 12 percent in the previous four days, the biggest four-day drop in more than four months. But gas futures managed to end the month of May up nearly 6 percent. Futures hit a 3-1/2-month high of $2.759 just over a week ago, which most traders said removed gas from favor over coal for power generation. Since posting a 10-year low of $1.902 twice in late April, nearby futures were up 27 percent on signs that record production is finally slowing and demand is picking up as more electric utilities switched from coal to gas. In the cash market, weekend gas bound for the NYMEX delivery point Henry Hub NG-W-HH in Louisiana was heard early at $2.23 on active volume near 796 million cubic feet (mmcf), down 11 cents from Thursday's $2.34 average. Early Hub cash deals were also done at an 11-cent discount to the front-month contract, little changed from deals done late Thursday at a 12-cent discount. Gas on the Transco pipeline at the New York citygate NG-NYCZ6 was heard early near $2.28 on volume near 253 mmcf, down 18 cents from Thursday's average of $2.46. DESPITE LIGHTER BUILDS, STORAGE STILL BLOATED Weekly gas storage data, while in line with Reuters poll estimates, was well below average for the seventh time in eight weeks. Data Thursday from the U.S. Energy Information Administration showed U.S. natural gas inventories rose 71 billion cubic feet (bcf) last week, in line with Reuters estimates for a 70-bcf gain, but well below the year-ago adjusted build of 89 bcf and the five-year average build for that week of 100 bcf. Total domestic gas inventories rose to 2.815 trillion cubic feet (tcf). The weekly build trimmed the surplus to last year to 732 bcf, or 35 percent, and cut the excess versus the five-year average to 724 bcf, or 35 percent. The surplus to last year has dropped significantly from late-March peaks, but stocks remained at record highs for this time of year. There are concerns the glut will drive prices lower this summer as storage caverns fill. The storage surplus to last year will have to be cut by another several hundred bcf to avoid breaching the government's 4.1-tcf estimate of capacity. Stocks peaked last year in November at a record 3.852 tcf. Early estimates for next week's EIA report range from 40 bcf to 80 bcf versus an 81-bcf adjusted increase a year earlier and a five-year average gain for that week of 99 bcf. PRODUCTION FALLING FROM RECORD Thursday's EIA data showed gas production was finally dropping from January's record high, with two straight monthly declines. The EIA said Thursday U.S. natural gas production fell 0.4 percent in March to 71.76 bcf as producers continued to scale back drilling in the face of low prices. It was a second monthly decline after a revised 1 percent fall in February. In addition, Baker Hughes data last week showed the gas-directed rig count fell by six to a 10-year low of 594. The near 37 percent drop in dry gas drilling -- since peaking at 936 in October -- has stirred talk producers were finally getting serious about stemming the flood of supplies. But the shift away from dry gas to higher-value shale oil and shale gas liquid plays still produces plenty of associated gas that ends up in the market after processing. That has slowed the overall drop in dry gas output. MORE FUNDAMENTALS The National Weather Service's six- to 10-day outlook issued on Thursday called for above-normal readings in much of the mid-Continent and normal or below-normal readings on both coasts. Nuclear power plant outages were running at about 17,300 megawatts, or 17 percent, on Friday, down from about 19,700 MW a year ago, but up from a five-year outage rate of about 12,000 MW. (Reporting by Eileen Houlihan; editing by Jeffrey Benkoe)

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