8-K: United States Natural Gas Fund Reports $185 Million Net Income for May 2024

The United States Natural Gas Fund, LP reported a net income of $185 million for the month of May 2024, driven by realized trading gains and offset by unrealized losses.

Summary

• The United States Natural Gas Fund, LP (UNG) released its monthly account statement for May 2024.
• The fund reported a net income of $185,078,542 for the month.
• This income was primarily driven by realized trading gains on commodity futures of $206,876,481 and realized gains on swap contracts of $20,996,479.
• These gains were partially offset by unrealized losses on commodity futures of $45,465,971 and unrealized losses on swap contracts of $227.
• The fund also generated $313,977 in dividend income and $3,208,737 in interest income.
• Total expenses for the month were $875,934, including management fees, professional fees, and brokerage commissions.
• The fund's net asset value decreased from $838,546,931 at the beginning of the month to $730,575,004 at the end of the month.
• This decrease was due to net withdrawals of $358,075,333 and the net income of $185,078,542.
• The net asset value per share was $17.71 based on 41,246,103 shares outstanding.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the fund generated significant net income, the decrease in net asset value due to withdrawals is a concern. The results are within the expected range for a commodity fund.

Positives

• The fund generated significant income from realized trading gains on commodity futures and swap contracts.
• The fund also earned income from dividends and interest.

Negatives

• The fund experienced unrealized losses on commodity futures and swap contracts.
• The fund's net asset value decreased significantly due to net withdrawals.

Risks

• The fund's performance is subject to the volatility of commodity futures and swap contracts.
• Unrealized losses can significantly impact the fund's net asset value.
• Large withdrawals can negatively affect the fund's overall value.

Management Comments

• Stuart P. Crumbaugh, Chief Financial Officer, stated that the information in the account statement is accurate and complete to the best of his knowledge and belief.

Industry Context

This report provides insight into the performance of a natural gas-focused exchange-traded fund (ETF), which is subject to the fluctuations of the natural gas market. The results reflect the inherent volatility of commodity trading.

Comparison to Industry Standards

• It is difficult to compare this specific monthly result to industry standards without more context on the performance of similar natural gas ETFs.
• However, the fund's reliance on futures and swap contracts is typical for such funds, and the reported gains and losses are within the expected range for a volatile commodity market.
• Other similar funds include the ProShares Ultra Bloomberg Natural Gas (BOIL) and the VelocityShares 3x Long Natural Gas ETN (UGAZ), but their performance will vary based on their specific strategies and leverage.

Stakeholder Impact

• Shareholders experienced a decrease in net asset value per share due to net withdrawals and unrealized losses.
• The fund's performance impacts investors who are exposed to the natural gas market.

Key Dates

Keywords

Natural Gas, Commodity Futures, Swap Contracts, Net Asset Value, Trading Gains, Unrealized Losses, UNG, USCF