U.S. Gas Fund May Shrink With CFTC Rules

U.S. Natural Gas Fund, the largest exchange traded fund in the fuel, may be forced to shrink if U.S. regulators tighten limits on energy speculation, said John Hyland, the fund’s chief investment officer. The Commodity Futures Trading Commission may cap energy investments amid concern speculators contributed to record high commodity prices last year. New limits may force the fund to reduce shares, Hyland said in a Bloomberg television interview.

“The problem there is the shareholders are in UNG because they want the natural gas exposure,” Hyland said. The $4 billion fund is an “easy target” for politicians who need a “villain” to blame for high energy prices, he said. Interest in the fund boomed this year. Shares outstanding grew 11 fold since the start of the year to 347.4 million, pushing the ETF’s natural gas holdings to a July peak equal to 20 percent of all the gas consumed in the U.S. last year..... Read the entire article