Flat

Range Resources Corp. expects capital spending to be flat from 2011 to 2012 as the company becomes more efficient in the Marcellus Shale and completes its sale of assets in the Barnett Shale, but to rise in 2013 as the company increases drilling.

Even with three days of flat to much stronger pricing Monday through Wednesday, only Marcellus Shale numbers in northeast Pennsylvania were able to eke out a small gain during the week ending Thursday. Other plays fell 6-12 cents during that period.

Flat numbers at Tennessee Zone 6 and the PG&E citygate and about a nickel loss at Dracut were the only exceptions to fairly strong price gains Wednesday everywhere else in the market. Temperatures were staying fairly mild across the southern third of the United States, but with lows in the 30s and 40s forecast for Thursday north of there into Canada, it was obvious that heating demand is starting to play an increasing role in the gas price equation.

All the indicators are that the natural gas industry is headed into a huge oversupply, fueled by flat demand and continued gigantic growth in shale gas. Speakers touched on a developing supply bubble in different ways during the opening day Tuesday of the “LDC Forum: Rockies and the West” conference in Los Angeles, noting that it will require some creative marketing to pump up demand.

Fueled by robust demand for natural gas in the industrial and power generation sectors, pressure on gas prices is likely to be flat in the upcoming 2010-2011 winter heating season, according to a winter outlook released Tuesday by the Natural Gas Supply Association (NGSA).

Except for flat to slightly higher numbers in Western Canada and El Paso’s Bondad pool, prices continued to slip at nearly all points Friday. Cooling load remained fairly high throughout most of the southern third of the U.S., but that was overcome by forecasts of little more than warm weather in northern market areas, the previous day’s drop of 6.8 cents by September futures and the usual weekend decline of industrial demand.

Most of the cash market varied little from flat Friday, but modest softness in the West tended to be barely more plentiful than small gains at eastern points. Moderately warmer temperatures were returning in the South, Northeast and Midwest, and cooling trends in the Rockies and desert Southwest were resulting in little cooling load remaining at western trading points.

Mild weather in Canada and the northern United States fails to halt the continuation of cash advance.

A few points had held out with flat to mildly higher prices a day earlier, but all of the cash market was united in falling numbers Thursday as moderate spring weather and weak futures ganged up to depress physical prices.