UPDATE 1-U.S. natgas rig count climbs 5 to 958-Baker Hughes

* Gas drilling rig count just 15 below mid-April peak

* Gas futures slip slightly, still up after rig data (Adds details, background, graphic)

NEW YORK, June 25 (Reuters) - The number of rigs drilling for natural gas in the United States rose by 5 this week to 958, according to a report on Friday by oil services firm Baker Hughes in Houston.

While the gas-directed rig count has largely declined since hitting a 14-month high of 973 on April 16, falling six times in the last 10 weeks, the count is still only down 15 rigs in the last two-plus months.

U.S. natural gas futures NGc1, which were up 6.2 cents, or 1 percent, at $4.81 per million British thermal units just before the report, slipped slightly to $4.794 after the data, then recovered to about $4.80, still up more than 5 cents.

Graphic: link.reuters.com/sup34k

Low gas prices in the first quarter had many expecting gas drilling to finally slow this year, but the rig count is still well above the 850 mark which some analysts say is necessary to turn year-on-year output negative.

Steady gains in horizontal rigs - the type used to extract gas from shale - have lessened the chance production will slow much, if at all, this year. [ID:nN18102313]

Recent EIA estimates put U.S. gas output this year at more than 22 tcf, its highest level since 1973, and most traders agree a strong recovery in industrial demand, which accounts for nearly 30 percent of total gas consumption, may be needed to soak up some of the excess supply.

Analysts said government attempts to impose a deepwater drilling moratorium in the Gulf of Mexico should not have a significant impact on gas production, noting most of the gas output gains over the last couple of years have come from onshore shale wells.

The U.S. natural gas drilling rig count is up 293, or 44 percent, since bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 active gas rigs.

While the gas rig count is 40 percent off its record peak of 1,606 from September 2008, it still stands 271 rigs, or 39 percent, above the same week last year.

With inventories still near record highs and 2010 gas output likely to reach levels not seen since the early 1970s, many traders expect the market to remain oversupplied this year unless demand picks up sharply with the economic recovery. (Reporting by Joe Silha; Editing by John Picinich)