United States 12 Month Natural Gas Fund files audited financial statements

United States 12 Month Natural Gas Fund, LP (UNL) filed audited statements for its GP, USCF, as Exhibit 99.1 to a Form 8-K covering fiscal year-ends Dec 31, 2025 and 2024; the fund clarified the exhibit is not deemed “filed” under Section 18 of the Exchange Act. UNL has market cap $16.63M, trades at $7.40/sh, is down 1yr -26.95% but is up YTD +0.27%. Monthly account statements for Nov 30, 2025; Dec 31, 2025; and Jan 31, 2026 (including income and NAV change statements required by CEA Rule 4.22) are available on the fund website, underscoring routine regulatory compliance and transparency.

Analysis

The natural-gas-linked product’s price action is best read as the intersection of two mechanical drivers: futures curve dynamics and episodic weather/LNG demand shocks. A 12-month rolling structure meaningfully mutes single-month contango pain, but it cannot eliminate losses when the entire forward curve compresses or when risk premia evaporate quickly; that explains persistent underperformance even absent structural supply shocks.

Second-order winners are infrastructure owners and long-dated LNG sellers: pipelines, storage operators and contracted LNG exporters see revenue insulation because basis differentials and take-or-pay contracts re-route marginal demand away from spot volatility. Conversely, short-tenor leveraged funds and any market players reliant on favourable roll yields remain the obvious losers — their P&L moves amplify contango-driven declines even if physical balances tighten later.

Key catalysts to watch over the coming weeks are threefold and time-staggered: (1) near-term weather volatility (0–30 days) that can swing front-month Henry Hub by +/-30% on a cold snap; (2) summer injection season (3–6 months) and hurricane risk to Gulf production; (3) incremental LNG commissioning and commercial liftings through 6–18 months which permanently re-link US gas to global oil/gas economics. Each catalyst has an asymmetric impact — a short, severe winter can vaporize shorts in days while a gradual supply response from US producers typically erodes a long position over quarters.

Contrarian angle: current market positioning discounts the fragility of US dry-gas supply if oil-directed drilling rebounds and producers prioritize cash returns over growth. That makes long-dated, capped upside exposure (calendar spreads or long-dated call spreads) attractive as a convex play — limited premium for outsized payoff if weather/LNG demand reasserts itself while keeping drawdown manageable if the contango persists.

Key Decisions for Investors

• Tactical long convexity: Buy 3-month Henry Hub call spreads (long ATM+10% / short ATM+60%) via NYMEX options or UNG calls to capture cold-snap upside. Size 1–2% NAV, max loss = premium; aim for 3–6x payoff if front-month rallies >50% within 90 days.
• Relative-value producer exposure: Buy EQT (EQT) shares as a 6–12 month position — target +35% if nat-gas prices recover, stop -20%. Rationale: high operating leverage to gas with modest capex; size 3–5% NAV.
• Short roll-risk product: Initiate a small short or buy puts on UNL (or overweight short UNG) ahead of summer roll season. Keep size conservative (1–2% NAV); downside target ~20–30% if contango persists, but cap exposure since a severe winter or LNG shock can spike prices quickly.
• Infrastructure long: Buy Kinder Morgan (KMI) or Cheniere Energy (LNG) on 6–18 month horizon. Expect 15–30% upside from firm fee revenues and higher throughput if exports rise; stop -12%. This captures basis wins and de-emphasizes spot volatility.
• Pair trade (risk-controlled): Long EQT / Short UNL — size 2–4% NAV pair to capture producer upside vs commodity-fund roll drag. Expected asymmetric return: +30% on pair if gas tightens; worst-case -15% if curve stays weak and producers cut capex slowly.