* Front month below Tuesday's 2012 high
* Nuclear power plant outages still strong
* Cooler weather on tap for much of the country
* Coming up: EIA, Enerdata natgas storage data Thursday
By Joe Silha
NEW YORK, Oct 3 (Reuters) - U.S. natural gas futures lost ground on Wednesday after six straight days of gains, pressured by profit-taking ahead of Thursday's weekly inventory report despite cooler weather forecasts for next week that should stir more heating demand.
Chart traders said front-month futures were due for a technical pullback after climbing 24 percent in the previous six sessions, their biggest six-day run in three years.
Fundamental traders, too, remained skeptical of the upside, with storage and production still at or near record highs.
"I think this is some technical selling or profit taking ahead of tomorrow's (EIA storage) number, but I'm not sure the recent buying was fundamentally based," a Texas trader said.
"It looked like an over reaction to the season's first cold shot, but the weather forecasts show temperatures moderating after that," he added.
At 1:15 p.m. EDT (1715 GMT), front-month gas futures
on the New York Mercantile Exchange was down 16.2 cents, or 4.6 percent, at $3.369 per million British thermal units after sinking midday to an intraday low of $3.354. The nearby contract on Tuesday posted a 2012 high of $3.546.
Futures open interest has jumped more than 76,000 contracts during the recent move up, indicating that new length helped back much of the upside.
But the 14-day exponential relative strength index on Tuesday climbed into very overbought territory near 85, its highest in more than 4/1/2 years and a possible warning to new longs that a sell-off was imminent.
Competition from low-priced coal could also curb buying. As prices push well above $3 per mmBtu, gas could become less competitive with coal and some utilities that have been burning cheaper gas to generate power could switch back to coal.
Loss of that demand, which helped prop up gas prices all summer, could force more gas into a well-supplied market.
Producers, too, could be tempted if prices move much higher, opting to hook up wells that have been drilled but not flowing because gas prices below $3 were not very attractive.
After a fairly mild week this week, MDA EarthSat expects temperatures next week to cool to below normal for most of the eastern two-thirds of the nation.
But the private forecaster in its 11-to-15 day outlook noted the trend was shifting warmer, with above normal readings expected west of the Rockies and seasonal temperatures seen for the rest of the nation.
INVENTORIES STILL AT RECORD
Energy Information Administration data last week showed that total gas inventories for the week that ended Sept. 21 climbed to 3.576 trillion cubic feet, a record high for that time of year.
(Storage graphic: )
The weekly build of 80 billion cubic feet was the largest injection so far in 2012.
Traders and analysts polled by Reuters expect stocks to have gained 71 bcf in Thursday's EIA storage report.
Stocks rose an adjusted 101 bcf during the same week last year. The five-year average increase for that week is 78 bcf.
Record heat this summer helped trim a huge storage surplus relative to last year by 67 percent from its late-March high, but storage builds in autumn are likely to pick up if weather-related demand remains moderate.
At 84 percent full, total stocks are hovering at a level not normally reached until the third week of October and still offer a huge cushion that can help offset any weather-related spikes in demand or supply disruptions from storms.
Gas inventories are still likely to end the stock-building season above last year's all-time high of 3.852 tcf.
PRODUCTION ALSO HIGH
Drilling for natural gas has been in a near steady decline for almost a year, with the gas-directed rig count down some 54 percent since last October and posting a new 13-year low just last week.
But so far, production shows few, if any, signs of slowing.
(Rig graphic: )
While dry gas drilling has become largely uneconomical at current prices, gas produced from more-profitable shale oil and shale gas liquids wells has kept output stubbornly high.
EIA gross natural gas production data on Friday showed that July output climbed 0.4 percent from June to 72.58 bcf per day, just below January's record high of 72.74 bcfd.
(Additional reporting by Eileen Houlihan;Editing by Sofina Mirza-Reid)
Keywords: MARKETS NYMEX/NATGAS