10-Q: United States Natural Gas Fund Q1 2026 Performance Report

United States Natural Gas Fund, LP reports a net income of $109.7 million for the first quarter of 2026 amid volatile natural gas market conditions.

Summary

• Net income for the three months ended March 31, 2026, was $109.7 million, compared to $208.8 million in the same period of 2025.
• Net asset value (NAV) per share decreased from $12.20 at the start of the period to $11.70 as of March 31, 2026.
• Total assets declined to $453.7 million from $579.5 million at the end of 2025.
• The fund held 11,542 NYMEX natural gas futures contracts as of March 31, 2026.
• The fund experienced a total return of (4.10)% for the first quarter of 2026.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral report, as the fund is performing according to its stated objective despite the inherent volatility and price decline in the underlying natural gas market.

Positives

• The fund successfully maintained its investment objective of tracking the Benchmark Futures Contract within the targeted range.
• Operating expenses, including management fees, were lower in Q1 2026 ($1.53 million) compared to Q1 2025 ($1.93 million).
• The fund maintains a strong liquidity position with $345.8 million in cash and cash equivalents.

Negatives

• The fund reported a net loss per limited partner share of $0.50 for the quarter.
• Unrealized losses on open commodity futures contracts totaled $18.0 million as of March 31, 2026.
• Total partners capital decreased to $443.8 million from $550.6 million at year-end 2025.

Risks

• Market volatility in natural gas prices, which saw a (21.76)% decrease in the Benchmark Futures Contract during the quarter.
• Exposure to contango and backwardation in the futures market, which impacts total returns.
• Potential for regulatory changes regarding position limits and accountability levels.
• Credit risk associated with OTC swap counterparties and futures commission merchants.
• Interest rate risk affecting the value of Treasury holdings.

Future Outlook

USCF anticipates that interest rates may continue to stagnate in the near future and that fees and expenses may remain lower than interest earned, potentially allowing the fund to outperform its benchmark. However, market volatility, geopolitical conflicts, and regulatory constraints remain significant factors that could impact future performance.

Management Comments

• USCF believes that market arbitrage opportunities will cause daily changes in UNG's share price to closely track daily changes in its per share NAV.
• USCF anticipates that UNG could possibly outperform its benchmark so long as interest earned is higher than the fees and expenses paid by the fund.

Industry Context

StockSavvy.ai notes that the fund's performance reflects the broader volatility in the U.S. natural gas market, driven by seasonal demand patterns, increased LNG export capacity, and the ongoing impact of global geopolitical tensions on energy supply chains.

Comparison to Industry Standards

• The fund's tracking error remains within the stated goal of plus/minus 10% of the Benchmark Futures Contract over 30-day periods.
• The fund's management fee structure (0.60% for assets up to $1B) is consistent with standard commodity pool operator practices for exchange-traded products.

Corporate Governance

Legal Proceedings

• The fund is not currently party to any material legal proceedings.
• USCF, as general partner, is involved in ongoing litigation related to the United States Oil Fund, LP, which is being vigorously contested.

Related Party Transactions

• Management fees paid to USCF.
• Licensing fees paid to NYMEX.
• Fees paid to Marketing Agent and BNY Mellon for administrative services.

Stakeholder Impact

• Shareholders are subject to market price volatility of natural gas.
• Authorized Participants benefit from reduced transaction fees.

Next Steps

• Continue daily management of futures contracts to track the Benchmark Futures Contract.
• Monitor regulatory developments regarding position limits.
• Maintain liquidity to meet potential redemption requests.

Key Dates

Keywords

Natural Gas, Commodity Pool, Futures Contracts, UNG, Energy Investing, USCF, Commodity Trading