Things looking ugly for the UNG
FT Energy Source
By Izabella Kaminska
"Last week, prominent oil-industry financier Matt Simmons, CEO of Simmons & Company International, weighed in on the UNG/commodity exchange-traded-fund (ETF) debate by posting the following missive to a handful of recipients:
How on earth can a tiny firm amass 30% of nat. gas contracts, with funding jumping from $727 million to $4.5 billion in three months as nat. gas prices tank? Why would so many little investors plunge into buying natural gas contract exposure when every new article over past three months predicted gas gluts and prices soon to plunge to $1 to $2 dollars?Simmons’ email includes some pretty frothy allegations, which we are not minded to repeat here. But his core point is undeniably valid, especially when demand for this particular ETF still remains high despite torrid fundamentals for nat gas."