NEW YORK (Dow Jones)--U.S. natural gas futures plummeted Friday, declining for the second straight day as cooler East Coast weather forecasts and weak expectations for industrial demand prompted traders to sell ahead of a long weekend.

Natural gas for October delivery settled 17.8 cents, or 4.4% lower, at $3.854 a million British thermal units on the New York Mercantile Exchange.

Friday's loss was the benchmark contract's steepest open-to-close decline of the summer, though the day was not as volatile as some other recent sessions.

The contract came further off a three-week high reached Thursday, when prices briefly touched $4.13/MMbtu amid early forecasts of a disruptive storm in the Gulf of Mexico before settling down for the session.

On Friday, futures lost some ground after the Labor Department's nonfarm payrolls report showed the economy failed to add any jobs last month. The natural gas market does not track economic data as closely as some other commodities, but the weak employment data was seen hurting industrial demand, a growing concern for many market participants.

A government report due next week will likely show a modest decline in demand from industrial users, the trading advisory firm Ritterbusch and Associates wrote in a note to clients. Forecasts also show the eastern half of the U.S. will be cooling over the next week, which will further cut into gas-fired power plant usage.

With supply still plentiful and demand uncertain, "many people don't like to hold positions, especially ahead of the weekend," said Jay Levine, president of Portland, Maine-based Enerjay LLC.

Oil-field service company Baker Hughes Inc. (BHI) on Friday said the number of rigs drilling for natural gas in the U.S. fell for the second straight week, but few market watchers expect supply to seriously contract any time soon, Levine said.

Traders, meanwhile, continued to shrug off the effects the Tropical Storm Lee in the Gulf of Mexico, a storm that was sitting nearly stationary south of the Louisiana coast on Friday afternoon with maximum sustained winds of around 35 miles per hour, according to the National Hurricane Center.

Producers including Exxon Mobil (XOM) and BP PLC (BP, BP.LN) have already removed workers from some deep-water platforms as a precaution.

The storm had shut in about a third of the Gulf's gas production Friday, but the region only accounts for about 7% of total domestic production.