IECA asks SEC to not let gas futures fund issue more shares

The Industrial Energy Consumers of America urged the US Securities and Exchange Commission on July 16 to not let the United States Natural Gas Fund LP issue additional shares, and requested a public hearing.

The Industrial Energy Consumers of America urged the US Securities and Exchange Commission on July 16 to not let the United States Natural Gas Fund LP issue additional shares. It also requested a public hearing on the matter.

The fund’s shares trade on the NYSE Euronext Arca exchange under the “UNG” ticker symbol. It is designed to track movements in the price of gas delivered at the Henry Hub, according to a fact sheet at its website, www.unitedstatesnaturalgasfund.com.

It said that its portfolio consists of listed gas futures contracts “and other gas-related futures, forwards, and swap contracts. These investments will be collateralized by cash, cash equivalents, and US government obligations with remaining maturities of two years or less.”

The fund had more than 347.4 million shares outstanding and a $4.7 billion market capitalization on July 17. It had more than $3.61 billion of assets as of June 30. Its general partner is United States Commodity Funds LLC of Alameda, Calif., which also operates funds tracking crude oil, gasoline, and heating oil prices.

IECA said that it believes a public hearing is necessary to address the potential negative impact additional US Gas Fund shares could have on long-term natural gas prices for manufacturers and other consumers. It said that the Wall Street Journal reported on July 8 that the fund asked the SEC “for a 10-fold increase in issued shares, which justifiably raises market power-market influence concerns.”

Contact Nick Snow atnicks@pennwell.com

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