Market questions UNG's influence

The US Natural Gas Fund (UNG), an exchange-traded fund (ETF) that tracks the prompt-month US natural gas price by buying Nymex futures and Nymex / ICE Henry Hub swaps, has caused controversy by building up a large market position.

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The net asset value of the UNG rose in three months from $727 million to over $4.5 billion in July, while the price of natural gas in the US rose by 19% during the same period, fuelling claims that the fund is moving prices. The fund reportedly represents 30% of the prompt-month Nymex contract volume. "When one player has 30% it is a gorilla in the marketplace and it has an impact on price," says Paul Cicio, president of Industrial Energy Consumers of America. "Funds like this do not belong on

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