Consumption of natural gas in both the United States and Mexico is on the rise, according to the U.S. Energy Information Administration (EIA), which once again revised its natural gas price forecasts upward for the rest of 2013 and 2014.

EIA expects domestic natural gas consumption to average 70 Bcf/d this year, compared with 69.7 Bcf/d in 2012, and to slip to 69.6 Bcf/d in 2014. “Colder winter temperatures forecast for 2013 and 2014 (compared with the record-warm temperatures in 2012) are expected to increase the amount of natural gas used for residential and commercial space heating,” the agency said in its Short-Term Energy Outlook, which was released Tuesday.

And Mexico’s use of natural gas is rising faster than the country’s domestic production, “leading to both record pipeline gas imports from the United States and growth in the country’s imports of liquefied natural gas (LNG),” EIA said. “Natural gas trade between Mexico and the United States has been growing; daily net exports from the United States to Mexico so far in 2013 (January 1-May 6) are estimated to average 1.6 Bcf/d, up almost 29% over the same period in 2012.”

EIA expects the Henry Hub natural gas spot price will increase to $3.92/MMBtu this year and $4.10/MMBtu in 2014, compared with an average of $2.75/MMBtu in 2012. In its last outlook, the agency had said it expected the Henry Hub price to average $3.80/MMBtu in 2013 and $4.00 in 2014 (see Shale Daily, May 9). That was about 27 cents and 40 cents higher than EIA forecast in April, respectively (see Shale Daily, April 11).

Natural gas spot prices averaged $4.04/MMBtu at the Henry Hub in May, down 13 cents from the $4.17/MMBtu average seen the previous month, EIA said.

Natural gas futures prices for September 2013 delivery (for the five-day period ending June 6, 2013) averaged $3.97/MMBtu, up 60% from the September 2012 contract during this period a year ago, which averaged $2.48/MMBtu.

Natural gas marketed production is projected to increase to 70.0 Bcf/d in 2013 and to 70.4 Bcf/d in 2014, compared with 69.2 Bcf/d last year. “Onshore production increases over the forecast period, while federal Gulf of Mexico production declines,” EIA said. “Natural gas pipeline gross imports, which have fallen over the past five years, are projected to remain near their 2012 level over the forecast.” LNG imports are expected to remain at minimal levels of about 0.4 Bcf/d in both 2013 and 2014.

The consensus forecast has been for an active Atlantic hurricane season this year. Forecasters at the National Oceanic and Atmospheric Administration (NOAA) have said they expect 13-20 named storms to form during “an active or extremely active” Atlantic hurricane season this year, including seven to 11 hurricanes, three to six of them major (Category 3 or higher).

Based on NOAA’s Atlantic hurricane outlook, EIA estimates that the median outcome for shut-in natural gas production in the federally administered Gulf of Mexico as a result of disruptions during the 2013 hurricane season is 46 Bcf. EIA’s simulation results indicate a 58% probability of offshore natural gas production experiencing outages during the hurricane season that are equal to or larger than the 32 Bcf of production shut in during the 2012 hurricane season.

“With the rapid growth in oil and natural gas production from onshore shale formations and other tight resources over the past several years, the share of total U.S. oil and natural gas production originating in the Gulf of Mexico has declined,” EIA said. “The growing share of total production from inland areas has reduced the vulnerability of overall U.S. oil and natural gas supply to hurricanes.”