The natural gas exchange traded fund (ETF) had most inflows of any other ETF during the month of July, despite the fact that the creation of additional shares was suspended on July 7.
UNG, which tracks a basket of natural gas futures and swaps, saw inflows of more than $1 billion, explains TransWorld News. Those inflows surpassed even the PowerShares QQQ (QQQQ) and the SDPRs (SPY).

The inflows came despite an investigation and hearings by the Commodity Futures Trading Commission (CFTC), as well as the fact that new shares couldn’t be created. UNG applied for 1 billion new shares to satisfy growing investor demand. The request has yet to be approved. The CFTC has also not yet given its final opinion about the role of speculators in the price run-ups.

Meanwhile, some investors appear bullish on the commodity. Todd Sullivan for Seeking Alpha explains that Energy Information Administration’s latest report showed a 0.8% decline in natural gas production in May. If that holds, could a price spike be in the offing? Only time will tell. Watch the trend lines for signs.

  • United States Natural Gas (UNG): down 43.5% year-to-date

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For full disclosure, some of Tom Lydon’s accounts hold UNG.

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