Natural Gas Fund Issues First New Shares Since July

U.S. Natural Gas Fund, the largest exchange traded fund in the fuel, issued 7 million new shares today, the first new units for the ETF since July because of regulatory efforts to limit market speculation. The new shares, worth $79 million, are backed by a total return swap with an investment grade counterparty, the fund said on its Web site. The Alameda, California based ETF, known as UNG, has said it would offer new shares starting Sept. 28 to purchasers who bought creation baskets of 100,000 units, which are then sold on the open market.

“UNG continues to work to re-balance the existing portfolio of natural gas exposure by using a range of suitable investments including listed futures contracts, listed cleared swaps, as well as over the counter total return swaps,” John Hyland, the fund’s chief investment officer, said in an e-mail. The $4 billion fund grew 11 fold since the start of the year to 347.4 million shares outstanding before it ran out in July. The fund backs its shares with natural gas contracts or swaps, and has been unable to expand its fuel holdings on the New York Mercantile Exchange and the Intercontinental Exchange.....Read the entire article

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

Crude Oil and Natural Gas Commodity ETF Explosion

Assessing whether more commodity funds will be forced to close, with John Hyland, United States Commodity Funds CIO and the Fast Money team.

UNG - Natural Gas Fund to Suspend Offering New Units

United States Natural Gas Fund, the world’s largest exchange traded fund in the fuel, said it will suspend offering new units after winning federal approval to issue up to 1 billion new shares. The approval will come today from the Securities and Exchange Commission in Washington, the fund said in regulatory filing. “Our attorneys have told us the prospect us has become effective this morning,” John Hyland, chief investment officer of the Alameda, California-based fund, said in a telephone interview. The fund said it will suspend offering “creation baskets,” which are blocks of 100,000 units, because of proposed regulatory.....Complete Story

Big Oil Speculator Defends Practice in Washington

John Hyland's funds control billions of dollars that flow in and out of energy markets, making him one of the biggest oil speculators in the world and also one of the biggest potential targets for federal regulators. The 50 year old Californian has been asked to appear before the Commodity Futures Trading Commission on Wednesday, where he will say that he isn't the boogie man everyone's looking for. There is evidence that he may be right. "Five years ago, they might have blamed the oil companies,".....Complete Story

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