NEW YORK, April 1 U.S. natural gas futures lost ground in early trading on Monday, pressured by milder weather forecasts for later this week and into next week that should slow demand, despite a brief cold shot expected over the next few days. Cold late-winter weather and above-average nuclear plant outages helped put a huge dent in inventories and have driven futures prices up nearly 30 percent since mid-February. But with milder spring temperatures just ahead, many traders expect prices to remain on the defensive, particularly with production still flowing near a record peak. "Moderating weather forecasts and declining seasonal demand in the coming weeks are likely to act as a brake on rising gas prices as the month of April unfolds," Addison Armstrong at Tradition Energy said in a report. Traders also noted that gas prices over $4 were likely to slow demand by prompting utilities to use coal rather than gas to generate power and increase supply by encouraging producers to turn on more wells. At 9:10 a.m. EDT (1310 GMT), front-month gas futures on the New York Mercantile Exchange were down 6.2 cents, or 1.5 percent, at $3.962 per million British thermal units after trading between $3.934 and $3.995. The front contract hit a 19-month high of $4.121 on Thursday before closing lower ahead of the Good Friday holiday. The nearby futures contract, which posted a sixth straight weekly gain with a 2.5 percent rise last week, ended the first quarter up about 20 percent. The contract finished the month of March about 15 percent higher. After a brief cold spell this week, forecaster MDA Weather Services expects warmth to build eastward, with above-normal temperatures from the Midwest to the East seen starting late in the week and continuing at least through mid-April.