U.S. dry natural gas output rose 1.9% in October from a year earlier to a high of 2.058 trillion cubic feet, the Energy Information Administration said late Monday.

The EIA released the figure in its December natural-gas report which includes extensive revisions to 2010 and 2011 data because of benchmarking to revised annual data for 2011.

Production has increased consistently owing to enhanced hydraulic fracturing and horizon drilling which can tap more reserves in shale formations.

The EIA said total U.S. natural-gas demand rose 8.4% in October from a year earlier, to 1.888 trillion cubic feet. That is the highest for an October based on EIA data beginning 2001. October marked the seventh straight month of year-on-year rises in demand. Since April year-on-year gains have averaged 9.5%. Those gains followed a 5.4% year-on-year drop in March--which capped an unusually warm winter.

Natural-gas use by electricity generators rose 16.7% in October from a year earlier to a total of 671 billion cubic feet. That was also the highest October demand from power generators in 12 years of EIA data.

Demand jumped as record-high end-October inventories kept prices cheap relative to the price of coal--its main competitor for utilities who can easily switch fuel sources. Benchmark U.S. natural-gas futures prices in October averaged 11% below year-earlier levels.

Monthly gas use by power companies last declined on a year-to-year basis in September 2011. In the months since demand has posted an average year-on-year rise of 22%, EIA data show.
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