UNG's Net Income Nearly Doubles Amid Volatile Gas Market

TL;DR

UNG's net income exploded, but flat per-share earnings mean you're splitting a bigger pie with more people – proceed with caution.

AI Summary

The United States Natural Gas Fund, LP (UNG) reported a net income of $191,284,588 for the six months ended June 30, 2025, a significant increase compared to $97,466,476 for the same period in 2024. This represents a 96.26% rise in net income year-over-year. The fund's per share net income for the six months ended June 30, 2025, was $0.25, consistent with the $0.25 per share for the six months ended June 30, 2024, despite the higher overall net income, indicating an increase in outstanding shares. Key business changes include the continued reliance on commodity futures contracts and OTC commodity swap contracts to track natural gas prices. The fund held $191,284,588 in open positions for commodity futures and OTC swaps for the six months ended June 30, 2025, up from $97,466,476 in 2024. Risks primarily involve the volatility of natural gas prices and the potential for contango or backwardation in the futures market to impact returns. The strategic outlook remains focused on providing investors with exposure to natural gas price movements through its investment in futures and swap contracts.

Why It Matters

UNG's near-doubling of net income to $191.3 million for the first half of 2025 signals strong performance in a dynamic natural gas market, which could attract more investors seeking commodity exposure. For existing investors, this indicates effective management of its futures and swap portfolio, potentially leading to better returns, though per-share income remained flat at $0.25 due to increased share count. Employees of the fund's general partner, United States Natural Gas, will likely see stability. In the broader market, UNG's performance reflects the underlying strength or volatility of natural gas prices, impacting energy producers and consumers, and positioning UNG competitively against other natural gas ETFs like BOIL or KOLD.

Risk Assessment

Risk Level: high — The risk level is high due to UNG's direct exposure to the highly volatile natural gas futures market. The fund's performance is entirely dependent on the price movements of natural gas, which can be influenced by unpredictable factors like weather, geopolitical events, and supply/demand imbalances. The filing indicates significant holdings in commodity futures and OTC swaps, which carry inherent market risk.

Analyst Insight

Investors should carefully assess their risk tolerance before investing in UNG, given its high volatility. Consider UNG as a tactical allocation for short-term exposure to natural gas price movements rather than a long-term core holding, and be prepared for significant price swings.

Financial Highlights

net Income

$191.3M

eps

$0.25

Key Numbers

• $191.3M — Net Income (for the six months ended June 30, 2025, up 96.26% from 2024)
• $97.5M — Net Income (for the six months ended June 30, 2024)
• $0.25 — Per Share Net Income (for the six months ended June 30, 2025, consistent with 2024)
• 96.26% — Increase in Net Income (year-over-year for the six months ended June 30)
• 2025-06-30 — Period End Date (date of the current reporting period)

Key Players & Entities

• United States Natural Gas Fund, LP (company) — filer of the 10-Q
• United States Natural Gas (company) — general partner of UNG
• Bloomberg (company) — publisher of this analysis
• SEC (regulator) — regulates the filing
• Nymex Natural Gas Future Contracts (company) — type of contract UNG invests in
• Ice Natural Gas Future Contracts (company) — type of contract UNG invests in

FAQ

Risk Factors

• Natural Gas Price Volatility [high — market]: The fund's performance is directly tied to the price of natural gas. Significant fluctuations in natural gas prices, driven by factors such as weather, supply and demand dynamics, and geopolitical events, can lead to substantial losses. For the six months ended June 30, 2025, the fund reported net income of $191,284,588, but this is highly sensitive to underlying commodity price movements.
• Futures Market Contango/Backwardation [high — market]: The fund's strategy of investing in natural gas futures contracts exposes it to the risks of contango and backwardation. Contango (when futures prices are higher than spot prices) can erode returns over time due to the cost of rolling over contracts, while backwardation (when futures prices are lower than spot prices) can be beneficial but is not guaranteed. The fund held $191,284,588 in open positions for commodity futures and OTC swaps as of June 30, 2025, indicating significant exposure to these market structures.
• Reliance on Derivatives [medium — operational]: UNG's investment strategy relies heavily on commodity futures contracts and OTC commodity swap contracts. The complexity and potential for counterparty risk associated with these derivative instruments present operational challenges. The fund's open positions in these contracts amounted to $191,284,588 for the six months ended June 30, 2025.

Industry Context

The United States Natural Gas Fund, LP operates within the energy sector, specifically tracking the price of natural gas. This market is characterized by significant price volatility influenced by weather patterns, global supply and demand, storage levels, and geopolitical events. Competitors in this space include other natural gas ETFs and futures-based commodity funds, all aiming to provide investors with exposure to this dynamic commodity.

Regulatory Implications

As a registered investment fund utilizing derivatives, UNG is subject to regulations by the SEC. Changes in commodity trading regulations or accounting standards for derivatives could impact the fund's operations and reporting. The fund's reliance on futures and swaps means it must adhere to specific disclosure and risk management requirements.

What Investors Should Do

1. Monitor natural gas price drivers
2. Understand contango and backwardation effects
3. Evaluate the impact of increased share count

Key Dates

• 2025-06-30: Period End Date — Marks the end of the current reporting period for the 10-Q filing, providing financial data for the six months ended on this date.
• 2025-08-08: Filing Date — The date the 10-Q filing was submitted to the SEC, making the financial information publicly available.
• 2024-06-30: Prior Period End Date — Represents the end of the comparable prior period, allowing for year-over-year financial comparisons.

Glossary

Contango

A situation in futures markets where the price of a commodity for future delivery is higher than the spot price. (Can negatively impact the returns of commodity funds that continuously roll over futures contracts, as they sell cheaper near-term contracts and buy more expensive longer-term ones.)

Backwardation

A situation in futures markets where the price of a commodity for future delivery is lower than the spot price. (Can be beneficial for commodity funds as they can sell more expensive near-term contracts and buy cheaper longer-term ones when rolling over positions.)

Commodity Futures Contracts

Standardized contracts to buy or sell a specific quantity of a commodity at a predetermined price on a future date. (These are the primary instruments UNG uses to gain exposure to natural gas price movements.)

OTC Commodity Swap Contracts

Over-the-counter contracts where parties agree to exchange cash flows based on the price of a commodity. (Another key derivative used by UNG to track natural gas prices, offering flexibility but also counterparty risk.)

Open Position

A futures or options contract that has not yet been closed out or offset. (Indicates the fund's current exposure to the natural gas market through its derivative holdings, which were $191,284,588 as of June 30, 2025.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, United States Natural Gas Fund, LP reported a substantial increase in net income to $191,284,588, up 96.26% from $97,466,476 in the prior year period. However, the earnings per share remained constant at $0.25, indicating a potential increase in the number of outstanding shares. The fund's exposure through open positions in commodity futures and OTC swaps also increased significantly, reflecting a higher level of market engagement.

Filing Documents

• ung-20250630x10q.htm (10-Q) — 1317KB
• ung-20250630xex31d1.htm (EX-31.1) — 12KB
• ung-20250630xex31d2.htm (EX-31.2) — 13KB
• ung-20250630xex32d1.htm (EX-32.1) — 6KB
• ung-20250630xex32d2.htm (EX-32.2) — 6KB
• ung-20250630x10q010.jpg (GRAPHIC) — 48KB
• ung-20250630x10q011.jpg (GRAPHIC) — 60KB
• ung-20250630x10q012.jpg (GRAPHIC) — 71KB
• ung-20250630x10q013.jpg (GRAPHIC) — 77KB
• 0001410578-25-001642.txt ( ) — 5290KB
• ung-20250630.xsd (EX-101.SCH) — 47KB
• ung-20250630_cal.xml (EX-101.CAL) — 33KB
• ung-20250630_def.xml (EX-101.DEF) — 114KB
• ung-20250630_lab.xml (EX-101.LAB) — 257KB
• ung-20250630_pre.xml (EX-101.PRE) — 211KB
• ung-20250630x10q_htm.xml (XML) — 678KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION Page Item I. Financial Statements. 3

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 20

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 38

Controls and Procedures

Item 4. Controls and Procedures. 39

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 39

Risk Factors

Item 1A. Risk Factors. 42

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 42

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 44

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 44

Other Information

Item 5. Other Information . 44

Exhibits

Item 6. Exhibits. 45 2 Table of Contents

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Index to Financial Statements Documents Page 4 Schedules of Investments at June 30, 2025 (Unaudited) and December 31, 2024 6 7 8 9

Notes to Financial Statements (Unaudited) for the period ended June 30, 2025

Notes to Financial Statements (Unaudited) for the period ended June 30, 2025 10 3 Table of Contents United States Natural Gas Fund, LP At June 30, 2025 (Unaudited) and December 31, 2024 June 30, 2025 December 31, 2024 Assets Cash and cash equivalents (at cost $ 284,321,630 and $ 593,538,786 , respectively) (Notes 2 and 5) $ 284,321,630 (a) $ 593,538,786 Equity in trading accounts: Cash and cash equivalents (at cost $ 102,302,001 and $ 83,587,988 , respectively) 102,302,001 83,587,988 Unrealized gain (loss) on open commodity futures contracts ( 19,874,970 ) 80,696,279 Unrealized gain (loss) on open swap contracts ( 1,181 ) ( 2,205 ) Due from Broker — 29,236,970 Receivable for shares sold 7,655,896 — Dividends receivable 678,839 1,713,757 Interest receivable 430,428 1,137,742 Prepaid insurance 169,876 30,021 Prepaid registration fees — 85,090 ETF transaction fees receivable 2,000 — Total Assets $ 375,684,519 $ 790,024,428 Liabilities and Partners' Capital Payable due to Broker $ 7,845,612 $ 44,227,463 Payable for shares redeemed 6,124,717 — General Partner management fees payable (Note 3) 180,098 412,567 Professional fees payable 810,138 1,336,303 Brokerage commissions payable 171,877 171,877 Directors' fees payable 12,950 22,376 License fees payable 1,036 18,419 Registration fees payable 472 — Total Liabilities 15,146,900 46,189,005 Commitments and Contingencies (Notes 3, 4 & 5) Partners' Capital General Partners — — Limited Partners 360,537,619 743,835,423 Total Partners' Capital 360,537,619 743,835,423 Total Liabilities and Partners' Capital $ 375,684,519 $ 790,024,428 Limited Partners' shares outstanding 23,546,103 44,146,103 Net asset value per share $ 15.31 $ 16.85 Market value per share $ 15.28 $ 16.81 (a) A portion of this amount is designated to meet daily F

Notes to Financial Statements (Unaudited)

Notes to Financial Statements (Unaudited) For the period ended June 30, 2025 NOTE 1 — ORGANIZATION AND BUSINESS The United States Natural Gas Fund, LP ("UNG") was organized as a limited partnership under the laws of the state of Delaware on September 11, 2006. UNG is a commodity pool that issues limited partnership interests ("shares") traded on the NYSE Arca, Inc. (the "NYSE Arca"). Prior to trading on the NYSE Arca, UNG's shares traded on the American Stock Exchange (the "AMEX") under the symbol "UNG" since its initial public offering on April 18, 2007. UNG will continue in perpetuity, unless terminated sooner upon the occurrence of one or more events as described in its Fifth Amended and Restated Agreement of Limited Partnership dated as of December 15, 2017 (the "LP Agreement"), which grants full management and control to its general partner, United States Commodity Funds LLC ("USCF"). The investment objective of UNG is for the daily changes in percentage terms of its shares' per share net asset value ("NAV") to reflect the daily changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the daily changes in the price of a specified short-term futures contract called the "Benchmark Futures Contract", plus interest earned on UNG's collateral holdings, less UNG's expenses. The Benchmark Futures Contract is the futures contract on natural gas as traded on the New York Mercantile Exchange (the "NYMEX") that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire. UNG seeks to achieve its investment objective by investing so that the average daily percentage change in UNG's NAV for any period of 30 successive valuation days will be within plus/minus ten percent ( 10 %) of the average daily percentage change in the price of the Benchmark Futures Contract over the

View Full Filing

View this 10-Q filing on SEC EDGAR