10-Q: United States 12 Month Natural Gas Fund Q1 2026 Results

United States 12 Month Natural Gas Fund, LP reports a net loss of $660,149 for the first quarter of 2026 as natural gas futures prices declined.

Summary

• Net loss for the three months ended March 31, 2026, was $660,149, compared to a net income of $4,184,874 in the same period of 2025.
• Net asset value (NAV) per share decreased from $7.34 at year-end 2025 to $6.90 as of March 31, 2026.
• Total return for the quarter was (5.99)%.
• The fund held 431 natural gas futures contracts as of March 31, 2026.
• Total assets at quarter-end were $15,594,637, down from $18,815,131 at December 31, 2025.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral report; the fund performed as expected given the underlying decline in natural gas futures prices, and there were no significant operational or governance surprises.

Positives

• The fund successfully maintained its investment objective, with NAV performance tracking within the targeted range relative to the Benchmark Futures Contracts.
• Management fees were reduced from 0.75% to 0.60% per annum effective May 1, 2024.
• The fund maintains a liquid portfolio with a significant portion of assets held in cash and government money market funds.

Negatives

• The fund recorded a net loss of $0.44 per share for the quarter.
• The benchmark natural gas futures price decreased by approximately 3.28% during the period.
• Realized losses on closed commodity futures contracts totaled $1,181,469 for the quarter.

Risks

• Exposure to commodity price volatility, particularly in the natural gas market.
• Risks associated with contango and backwardation in futures markets impacting total returns.
• Potential for tracking error between the fund's NAV and the benchmark futures contracts.
• Credit risk related to counterparties in OTC derivative transactions.
• Geopolitical risks, including the Russia-Ukraine war and Middle East conflicts, affecting energy prices.

Future Outlook

The fund intends to continue its investment strategy of tracking the average daily percentage changes of the spot price of natural gas via 12-month futures contracts. Management notes that while domestic supply and demand remain primary drivers, international demand and geopolitical events will increasingly influence price volatility.

Management Comments

• USCF believes that market arbitrage opportunities will cause daily changes in UNL's share price to closely track the per share NAV.
• USCF anticipates that interest earned on collateral holdings could potentially allow the fund to outperform its benchmark if such income exceeds fees and expenses.

Industry Context

StockSavvy.ai notes that the fund operates in a highly specialized niche of commodity ETFs. The performance reflects the broader seasonal and geopolitical volatility inherent in the natural gas market, which has been significantly impacted by the shift in European energy sourcing away from Russia.

Comparison to Industry Standards

• The fund's management fee of 0.60% is competitive within the commodity ETP space.
• The fund's tracking methodology is consistent with other commodity pool operators managed by USCF, such as UNG.

Legal Proceedings

• The fund is not currently party to any material legal proceedings.
• The General Partner (USCF) is involved in ongoing litigation related to the United States Oil Fund (USO), including the 'In re: United States Oil Fund, LP Securities Litigation' and related derivative actions.

Related Party Transactions

• The fund pays management fees to its General Partner, USCF.
• The fund shares directors' and officers' insurance and independent director fees with other Related Public Funds managed by USCF.

Stakeholder Impact

• Shareholders experienced a decline in NAV during the quarter due to market conditions.
• The fund continues to provide a mechanism for indirect exposure to natural gas price movements.

Next Steps

• Continued monitoring of natural gas futures market conditions.
• Ongoing compliance with SEC and CFTC reporting requirements.

Key Dates

Keywords

Natural Gas, Commodity Pool, Futures Contracts, UNL, Energy Investing, USCF