8-K: United States Natural Gas Fund Reports 2025 Annual Financials

United States Natural Gas Fund, LP (UNG) has filed its annual financial statements for the year ended December 31, 2025, as required by federal commodities laws.

Summary

• UNG issued its annual financial statements for the year ended December 31, 2025, as required by Rule 4.22 under the Commodity Exchange Act.
• Net income for 2025 was $34,228,548, a decrease from $65,145,775 in 2024.
• Total assets decreased from $790,024,428 as of December 31, 2024, to $579,489,846 as of December 31, 2025.
• Partners Capital decreased from $743,835,423 as of December 31, 2024, to $550,640,328 as of December 31, 2025.
• Net asset value per share decreased from $16.85 as of December 31, 2024, to $12.20 as of December 31, 2025.
• The fund experienced a negative total return of (27.60)% for the year ended December 31, 2025, following (17.24)% in 2024 and (64.22)% in 2023.
• The fund maintained effective internal control over financial reporting as of December 31, 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative report due to the continued decline in key financial metrics, including net income, total assets, partners' capital, and NAV per share, coupled with a third consecutive year of negative total returns, indicating persistent underperformance.

Positives

• Maintained effective internal control over financial reporting as of December 31, 2025, as affirmed by the independent registered public accounting firm.
• Net income remained positive at $34,228,548 for 2025, despite a decrease from the prior year.
• Realized gain on closed commodity futures contracts was $138,311,471 in 2025, a significant improvement from a realized loss of $(47,713,339) in 2024.

Negatives

• Net income decreased significantly by approximately 47% from $65,145,775 in 2024 to $34,228,548 in 2025.
• Total Assets declined substantially from $790,024,428 in 2024 to $579,489,846 in 2025.
• Partners Capital decreased from $743,835,423 in 2024 to $550,640,328 in 2025.
• Net Asset Value per share decreased from $16.85 in 2024 to $12.20 in 2025.
• The fund reported a third consecutive year of negative total returns, with (27.60)% in 2025, (17.24)% in 2024, and (64.22)% in 2023.
• Interest income significantly decreased from $31,116,762 in 2024 to $7,553,671 in 2025.
• The change in unrealized gain (loss) on open commodity futures contracts was a significant negative $(79,767,315) in 2025.

Risks

• Market risk arising from changes in the market value of commodity futures, options, and swap contracts.
• Credit risk due to the potential failure of a counterparty (e.g., FCM, swap counterparty) to perform its contractual obligations.
• Liquidity risk, particularly the possibility of an illiquid market for futures contracts.
• Basis risk, stemming from an imperfect correlation between movements in the price of futures contracts and the market value of the underlying natural gas.
• Valuation risk for OTC derivatives, which are less certain to value than actively traded instruments due to individually negotiated terms and lack of guaranteed price quotes.
• Impact of contango and backwardation, natural market forces that can cause the fund's total return to diverge from a hypothetical direct investment in natural gas over time.
• Risk of financial failure by the clearing broker (FCM), which could limit recovery to a pro rata share of segregated funds, potentially less than the total deposited.
• Risk of substantial loss of assets due to the failure or insolvency of the fund's custodian.
• Exposure to risk of loss associated with investments in money market funds.
• Market volatility caused by global events such as pandemics (e.g., COVID-19), wars (e.g., Russia-Ukraine), disputes among natural gas-producing countries, tariffs, and trade barriers, which could affect investment value, pricing, and liquidity.

Future Outlook

The filing primarily provides historical financial performance and does not contain explicit forward-looking statements or guidance beyond the fund's general investment objective and inherent market risks. It notes that market conditions could cause the fund to invest in Other Natural Gas-Related Investments to obtain greater liquidity or more favorable pricing.

Management Comments

• "Enclosed with this letter is your copy of the 2025 financial statements for the United States Natural Gas Fund, LP (ticker symbol UNG)."
• "We have mailed this statement to all investors in UNG who held shares as of December 31, 2025 to satisfy our annual reporting requirement under federal commodities laws."
• "Pursuant to Rule 4.22(h) under the Commodity Exchange Act, the undersigned represents that, to the best of his knowledge and belief, the information contained in this Annual Report for the years ended December 31, 2025, 2024 and 2023 is accurate and complete." (John P. Love, President & Chief Executive Officer of United States Commodity Funds LLC)

Industry Context

StockSavvy.ai notes that UNG operates within the highly volatile natural gas commodity market, which has seen significant price fluctuations influenced by global events such as geopolitical conflicts and supply chain disruptions. The fund's consistent negative total returns over the past three years reflect the challenging environment for natural gas-focused investment vehicles, particularly those tracking short-term futures contracts which are susceptible to contango effects. The decrease in interest income also suggests a broader shift in interest rate environments or the fund's cash management strategy.

Comparison to Industry Standards

• UNG's investment objective to reflect daily changes in the price of natural gas at the Henry Hub, as measured by a specified short-term futures contract, is a common strategy for commodity ETFs, but the stated tolerance of 'plus/minus ten percent (10%)' deviation over 30 successive valuation days is a specific performance benchmark.
• The fund's performance is heavily influenced by 'contango and backwardation,' which are inherent characteristics of futures markets and can cause significant divergence from spot price movements, a known challenge for commodity ETFs like the United States Oil Fund, LP (USO) or United States Brent Oil Fund, LP (BNO) also managed by USCF.
• The negative total returns of (27.60)% in 2025, (17.24)% in 2024, and (64.22)% in 2023 indicate underperformance relative to a stable or appreciating asset class, but are typical for funds tracking volatile commodities during periods of price decline or contango, similar to other energy commodity funds during bearish cycles.
• The management fee of 0.60% per annum on average daily total net assets of $1,000,000,000 or less is a standard fee structure for actively managed commodity pools, comparable to fees charged by other USCF-managed funds and similar commodity ETFs in the market.

Related Party Transactions

• USCF, as the General Partner, is contractually obligated to receive a management fee from UNG, paid monthly, equal to 0.60% per annum of average daily total net assets of $1,000,000,000 or less, and 0.50% for assets greater than $1,000,000,000.
• UNG shares the fees and expenses of its independent directors and directors and officers liability insurance on a pro rata basis with other Related Public Funds managed by USCF.
• UNG pays licensing fees to the NYMEX, with whom it has a licensing agreement, equal to 0.015% on all net assets, shared with certain Related Public Funds.
• USCF pays the fees of The Bank of New York Mellon (BNY Mellon) for custodial, administrative, accounting, and transfer agency services provided to UNG and the Related Public Funds.
• USCF pays the Marketing Agent's fee (0.025% of UNG's total net assets) and costs related to website construction and development.

Stakeholder Impact

• Shareholders: Experienced a significant decrease in net asset value per share and negative total returns for the year, indicating a loss on investment.
• General Partner (USCF): Received management fees, which decreased in absolute terms due to the decline in UNG's average daily total net assets.
• Brokers/FCMs: Received brokerage commissions, which decreased in 2025 primarily due to a lower number of natural gas futures contracts being held and traded.
• Swap Counterparties: Received flat fees on the daily notional value of OTC swap transactions entered into with UNG.

Next Steps

• Investors can obtain a copy of UNG's Annual Report on Form 10-K from the SEC's website (www.sec.gov) or USCF's website (www.uscfinvestments.com).
• Investors may call USCF at 1-800-920-0259 to speak to a representative and request additional material, including a current UNG Prospectus.
• Investors can visit the USCF website at www.uscfinvestments.com for information about other commodity-based exchange-traded funds managed by USCF.

Key Dates

Recommendation

The fund has demonstrated a consistent pattern of negative total returns over the past three years, including a substantial (27.60)% loss in 2025. Key financial metrics such as net income, total assets, and partners' capital have significantly declined. The inherent risks associated with commodity futures, including contango and market volatility, continue to negatively impact performance. Given the sustained underperformance and the challenging market dynamics for natural gas ETFs, a seasoned investor would likely recommend selling to mitigate further losses and reallocate capital to more promising investments.

Keywords

Natural Gas, UNG, Commodity Fund, Futures Contracts, SEC Filing, Financial Statements, Annual Report, Investment, Energy, Exchange Traded Fund, USCF, NYSE Arca, Commodity Pool