* Tropical activity stirs in Atlantic basin * Northeast, Midwest heat this week turns milder next week By Joe Silha and Eileen Houlihan NEW YORK, Aug 30 (Reuters) - U.S. natural gas futures ended lower on Friday, their first loss of the week as traders took profits ahead of a long holiday weekend, and ahead of milder Northeast and Midwest weather next week that should slow overall demand. New York Mercantile Exchange floor trading will be closed on Monday for the U.S. Labor Day holiday. Despite Friday's lower close, the front-month contract rose 2.8 percent this week, its third straight weekly gain, as warm weather over the last few weeks continued to kick up demand. The combined rise of nearly 11 percent since Aug. 9 was the biggest three-week run up in five months. For the month of August, the nearby contract logged its first gain in four months, increasing 3.9 percent. Technical traders agreed the market was overbought and due for a pullback after four straight gains. Many traders remained skeptical of the upside, with storage comfortable, production flowing at or near a record peak and no sustained heat or significant storm threats on the horizon to boost demand or trim offshore supplies. "There are no immediate storm threats and the temperature forecasts don't look as bullish as they did a few days ago," said Steve Mosley at The SMC Report in Arkansas. Front-month gas futures on the New York Mercantile Exchange ended down 3.7 cents, or 1 percent, at $3.581 per million British thermal units, after stalling overnight at $3.653, just shy of Thursday's five-week high of $3.655. While tropical activity picked up this week, with reports of two systems in the Atlantic, traders noted there were no immediate storm threats to Gulf of Mexico gas production. After a few more days of heat forecast for most of the nation, MDA Weather Services expects near seasonal or below seasonal temperatures to dominate the eastern half of the nation in its six- to 15-day outlook, with heat focused in the West. The U.S. Energy Information Administration reported on Thursday that total domestic gas inventories rose 67 billion cubic feet to 3.130 trillion cubic feet last week. Stockpiles are about 7 percent below last year's record highs at that time, but 1.5 percent above the five-year average. Early injection estimates for next week's report range from 45 bcf to 53 bcf. Stocks gained 33 bcf during the same year-ago week. The five-year average increase for that week is 60 bcf. Traders also noted that gas prices sold off today after the EIA said in its monthly gross gas production report that June output rose slightly from May and stood at nearly 2 percent above the same month a year ago. Baker Hughes Inc data on Friday showed the gas-directed rig count fell by seven this week to 380. The gas rig count posted an 18-year low of 349 in late June. But recent gas rig count gains, up in six of the last 10 weeks, have stirred concerns that new investment in gas pipelines and processing plants are allowing producers to hook up more wells and pump even more supply into an already well supplied market. The EIA still expects gas output in 2013 to hit a record high for a third straight year.