The WSJ is reporting that natural gas prices are slipping while the giant natural gas ETF United States Natural Gas (UNG) has been unable to create more shares.
In the article Natural-Gas Prices Slide as a Key ETF Can’t Buy, reporter Carolyn Cui writes that natural-gas prices dropped 4.3% yesterday.
Prices are weaker partially due to the fact that natural gas inventories are up and macro demand is down. However, the fact that UNG has maxed out its shares and failed to win regulatory approval in time to issue additional ones also appears to be impacting prices.
UNG’s rapid growth and strong market position may be behind the regulatory delay. Cui notes that the regulatory review process involves multiple agencies and could take up to six weeks. Filings were submitted June 5.