Natural Gas Spike Shrinks ETF Premium

By Don Dion

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The rally in natural gas isn\'t over, and the underlying value in United States Natural Gas and iPath Natural Gas rallied along with gas prices today. UNG\'s premium shrank to 5% on Monday with UNG up close to 3% and the net asset value up 13%. GAZ\'s premium declined to 11% as GAZ gained almost 5% and the net asset value advanced 8%. I expected UNG to fall today, and it was down as much as 6% in premarket trading, but the huge run-up in gas prices has overwhelmed the contraction in the premium. For most of the time that these funds have traded at a premium, UNG\'s premium exceeded that of GAZ. But now that UNG says it will issue more shares on Sept. 28, the premium should make its way to zero over the course of the next two weeks. ...