UNG's Q3 Loss Masks Stronger YTD Net Income Amid Asset Decline

Ticker: UNG · Form: 10-Q · Filed: Nov 7, 2025 · CIK: 1376227

Sentiment: mixed

Topics: Natural Gas Futures, Commodity Pool, ETF Performance, Energy Markets, Contango, Backwardation, Investment Risk, Financial Reporting

Related Tickers: UNG, USO, USL, UGA, UNL, BNO

TL;DR

**UNG's Q3 was rough, but year-to-date profits are up, yet overall assets are shrinking – proceed with caution.**

AI Summary

United States Natural Gas Fund, LP (UNG) reported a net income of $30,524,943 for the nine months ended September 30, 2025, a significant increase from $11,411,932 for the same period in 2024. This improvement was primarily driven by a realized gain of $129,894,969 on closed commodity futures contracts in 2025, contrasting with a realized loss of $81,062,710 in 2024. However, the fund experienced a net loss of $55,875,975 for the three months ended September 30, 2025, compared to a net income of $1,905,125 in the prior year's quarter. Total assets decreased to $650,650,435 as of September 30, 2025, from $790,024,428 at December 31, 2024. Partners' Capital also declined to $624,479,114 from $743,835,423 over the same period. The fund's net asset value per share was $12.97 at September 30, 2025, down from $16.85 at December 31, 2024. Cash and cash equivalents decreased from $593,538,786 to $483,345,718, reflecting net cash used in financing activities of $125,236,617 for the nine months ended September 30, 2025. The fund held 15,138 NYMEX Natural Gas Futures NG November 2025 contracts with a notional amount of $498,921,777.

Why It Matters

UNG's performance is crucial for investors seeking exposure to natural gas prices, as its investment objective is to track the daily percentage changes of Henry Hub natural gas. The significant year-over-year increase in nine-month net income to $30.5 million, despite a quarterly loss, indicates the volatile nature of commodity markets and UNG's active management of futures contracts. The decline in total assets and partners' capital, alongside a reduced NAV per share from $16.85 to $12.97, suggests a challenging period for the fund, potentially impacting its ability to track the underlying commodity effectively. This could lead to underperformance relative to direct natural gas investments, especially given the competitive landscape of energy ETFs and the impact of contango and backwardation on returns.

Risk Assessment

Risk Level: high — The fund's investment objective explicitly states that its NAV or market price of shares is not intended to equal the spot price of natural gas, and that contango and backwardation may significantly impact total return. The net asset value per share decreased from $16.85 at December 31, 2024, to $12.97 at September 30, 2025, representing a 23% decline. Furthermore, the fund experienced a net loss of $55,875,975 for the three months ended September 30, 2025, indicating significant short-term volatility.

Analyst Insight

Investors should carefully review UNG's tracking error and consider the impact of contango and backwardation on long-term returns, as the fund's objective is not to match the spot price. Given the decline in NAV per share and the quarterly loss, a cautious approach is warranted; consider diversifying natural gas exposure or exploring alternative investment vehicles that may offer more direct commodity price correlation.

Financial Highlights

debt To Equity
N/A
revenue
N/A
operating Margin
N/A
total Assets
$650,650,435
total Debt
N/A
net Income
$30,524,943
eps
N/A
gross Margin
N/A
cash Position
$483,345,718
revenue Growth
N/A

Key Numbers

Key Players & Entities

FAQ

What was the net income for United States Natural Gas Fund (UNG) for the nine months ended September 30, 2025?

UNG reported a net income of $30,524,943 for the nine months ended September 30, 2025, a substantial increase from $11,411,932 for the same period in 2024.

How did UNG's net asset value per share change from December 31, 2024, to September 30, 2025?

UNG's net asset value per share decreased from $16.85 at December 31, 2024, to $12.97 at September 30, 2025.

What was the primary driver of the change in UNG's nine-month net income?

The primary driver was a realized gain of $129,894,969 on closed commodity futures contracts for the nine months ended September 30, 2025, a significant improvement from a realized loss of $81,062,710 in the prior year.

What is UNG's investment objective regarding natural gas prices?

UNG's investment objective is for the daily changes in percentage terms of its shares' per share net asset value 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.

How many limited partner shares were outstanding for UNG as of November 3, 2025?

As of November 3, 2025, United States Natural Gas Fund, LP had 48,846,103 outstanding shares.

What impact do contango and backwardation have on UNG's investment returns?

Natural market forces called contango and backwardation may impact and have impacted the total return on an investment in UNG's shares relative to a hypothetical direct investment in natural gas, meaning the fund's performance may not perfectly track spot prices over time.

What was the total value of UNG's assets at September 30, 2025?

UNG's total assets stood at $650,650,435 at September 30, 2025, down from $790,024,428 at December 31, 2024.

Who is the General Partner of United States Natural Gas Fund, LP?

United States Commodity Funds LLC (USCF) is the General Partner of UNG, responsible for its full management and control.

What was the net cash provided by (used in) operating activities for UNG for the nine months ended September 30, 2025?

UNG reported net cash provided by operating activities of $92,856,069 for the nine months ended September 30, 2025, a significant improvement from net cash used of $38,754,701 in the prior year.

What types of investments does UNG primarily use to achieve its objective?

UNG primarily invests in futures contracts for natural gas traded on the NYMEX, ICE Futures Europe, and ICE Futures U.S., and to a lesser extent, other natural gas-related investments like cash-settled options, forward contracts, and OTC transactions.

Risk Factors

Industry Context

The natural gas market is characterized by significant price volatility driven by weather patterns, global supply and demand, and geopolitical factors. As a commodity pool, UNG aims to track the daily price movements of natural gas futures. The industry faces ongoing challenges related to storage levels, production output, and the increasing role of renewable energy sources, which can impact long-term price trends.

Regulatory Implications

UNG operates as a commodity pool and is subject to regulations by the CFTC. Changes in regulations concerning derivatives, commodity trading, or fund structures could impact UNG's operations and investment strategies. Compliance with these regulations is crucial for the fund's continued operation and investor protection.

What Investors Should Do

  1. Review the impact of futures contract rollover on performance.
  2. Assess the fund's cash management and financing activities.
  3. Monitor natural gas price trends and market sentiment.
  4. Evaluate the fund's expense structure.

Key Dates

Glossary

Net Asset Value (NAV)
The per-share market value of a fund, calculated by taking the total value of its assets, subtracting its liabilities, and dividing by the number of outstanding shares. (UNG's NAV per share decreased from $16.85 at December 31, 2024, to $12.97 at September 30, 2025, indicating a decline in the fund's underlying value.)
Benchmark Futures Contract
The specific near-month natural gas futures contract traded on the NYMEX used by UNG to track the price of natural gas. (UNG's investment objective is to have its daily NAV changes reflect the daily changes in this contract's price, making its performance directly tied to this benchmark.)
Contango
A market condition where futures prices are higher than spot prices, or longer-dated futures are higher than near-dated futures. This typically results in a loss when rolling futures contracts forward. (This is a key risk for UNG, as rolling its futures positions can erode returns if the market is in contango.)
Commodity Pool
An investment vehicle that trades in commodity futures, options on futures, or other commodity interests. UNG is registered as a commodity pool. (This classification subjects UNG to specific regulations and oversight by bodies like the CFTC.)
NYMEX Natural Gas Futures
Standardized contracts for the future delivery of natural gas, traded on the New York Mercantile Exchange. (UNG primarily invests in these contracts to gain exposure to natural gas prices. As of September 30, 2025, UNG held 15,138 such contracts.)
OTC Commodity Swap Contracts
Over-the-counter derivative contracts where parties agree to exchange cash flows based on the price of an underlying commodity, such as natural gas. (UNG uses these contracts, and experienced a realized loss of $29.5M on them in the nine months ended September 30, 2025.)

Year-Over-Year Comparison

UNG reported a substantial swing in profitability, with net income for the nine months ended September 30, 2025, reaching $30.5M compared to $11.4M in the prior year, largely due to a significant turnaround from a realized loss to a gain on commodity futures contracts. However, this positive trend was sharply reversed in the third quarter of 2025, which saw a net loss of $55.9M, a stark contrast to the $1.9M net income in the same quarter of 2024. Total assets and partners' capital have declined, with assets falling from $790.0M to $650.7M and partners' capital from $743.8M to $624.5M, reflecting a decrease in the fund's overall size and value per share.

Filing Stats: 4,519 words · 18 min read · ~15 pages · Grade level 13 · Accepted 2025-11-07 15:29:00

Filing Documents

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. 40

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. 43

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 43

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 43

Other Information

Item 5. Other Information . 43

Exhibits

Item 6. Exhibits. 44 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 September 30, 2025 (Unaudited) and December 31, 2024 5 7 8 9

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

Notes to Financial Statements (Unaudited) for the period ended September 30, 2025 10 3 Table of Contents United States Natural Gas Fund, LP At September 30, 2025 (Unaudited) and December 31, 2024 September 30, 2025 December 31, 2024 Assets Cash and cash equivalents (at cost $ 483,345,718 and $ 593,538,786 , respectively) (Notes 2 and 5) $ 483,345,718 $ 593,538,786 Equity in trading accounts: Cash and cash equivalents (at cost $ 161,400,508 and $ 83,587,988 , respectively) 161,400,508 83,587,988 Unrealized gain (loss) on open commodity futures contracts 1,086,363 80,696,279 Unrealized gain (loss) on open OTC commodity swap contracts ( 970 ) ( 2,205 ) Due from Broker 2,793,974 29,236,970 Dividends receivable 1,043,661 1,713,757 Interest receivable 808,408 1,137,742 Prepaid insurance 168,773 30,021 Prepaid registration fees — 85,090 ETF transaction fees receivable 4,000 — Total Assets $ 650,650,435 $ 790,024,428 Liabilities and Partners' Capital Payable due to Broker $ 8,429 $ 44,227,463 Payable for shares redeemed 24,644,635 — General Partner management fees payable (Note 3) 290,714 412,567 Professional fees payable 1,033,130 1,336,303 Brokerage commissions payable 171,877 171,877 Directors' fees payable 16,146 22,376 License fees payable 5,918 18,419 Registration fees payable 472 — Total Liabilities 26,171,321 46,189,005 Commitments and Contingencies (Notes 3, 4 & 5) Partners' Capital General Partners — — Limited Partners 624,479,114 743,835,423 Total Partners' Capital 624,479,114 743,835,423 Total Liabilities and Partners' Capital $ 650,650,435 $ 790,024,428 Limited Partners' shares outstanding 48,146,103 44,146,103 Net asset value per share $ 12.97 $ 16.85 Market value per share $ 13.07 $ 16.81 See accompanying notes to financial statements. 4 Table of Contents

Notes to Financial Statements (Unaudited)

Notes to Financial Statements (Unaudited) For the period ended September 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

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