By Daily Crux Editor Sean Goldsmith:

As investors bet on rising natural gas prices, assets in the U.S. Natural Gas Fund (UNG) increased to nearly $3.7 billion from around $670 million in February.

The huge demand could cause a major problem for the fund… Funds that hold commodities usually face restrictions on the number of shares they can issue to meet demand, and UNG is quickly approaching that number. The fund's managers asked the SEC's permission to increase the number of shares tenfold, but these requests usually take weeks.

In the meantime, or if the SEC denies the request, shares of UNG could trade at a premium to its net asset value - much like a closed-end fund - negating the investment promises of ETFs and possibly influencing prices in the futures market.

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