Commodity Fund Manager United States Commodity Funds LLC Comments on Recent
Media Reports About the Credit Risk of Certain Commodity Based Exchange Traded
Securities
ALAMEDA, Calif., Sept. 26 /PRNewswire/ -- United States Commodity Funds
LLC ("USCF"), the General Partner and manager of United States Oil Fund, LP
("USO"), United States Natural Gas Fund, LP ("UNG"), United States 12 Month
Oil Fund, LP ("USL"), United States Gasoline Fund, LP ("UGA") and United
States Heating Oil Fund, LP ("UHN") (together, the "Funds"), today responded
to recent comments made in media reports on the topic of credit risk and
commodity based exchange traded securities and ETFs. Such reports mentioned
that some commodity-based exchange traded securities make use of various
non-exchange traded commodity related derivatives, such as swaps, to provide
the fund's economic exposure to its underlying commodity or commodities. The
reports further raise the issue that such non-listed investments raise the
potential for counter-party risk on the part of the commodity funds if the
other participant in the swap were to be unable to perform as required by the
terms of the swap. With the recent disruption in the financial markets, the
General Partner feels that some investors might incorrectly draw conclusions
from the articles about the credit risks involved in the Funds managed by
USCF.
One article correctly mentions that a particular USCF fund, USO, can make
use of not only listed exchange-traded futures contracts, but also a wide
range of alternative oil related investments, including swaps. However, it may
appear from the article that USO actually does make use of non-exchange traded
investments at the present time. This is not true and may be a source of
confusion and unnecessary concern on the part of investors.
Every day, the Funds mentioned above publish a list of their portfolio's
investments as of the end of each day on their websites and investors may
review the current holdings. At the present time, except as noted below, all
of the Funds mentioned above only have exchange-traded futures contracts as
their sole commodity related investment. Currently all of the commodity
exposure for each of the Funds is in the form of commodity futures contracts
listed on the New York Mercantile Exchange ("NYMEX"). In addition, a review of
the quarterly filings for all of the Funds would show that each fund, since
its inception, has relied exclusively on exchange-traded commodity futures to
obtain its particular commodity exposure.
USCF cautions that although each Fund has exclusively relied on
exchange-traded commodity futures in the past, the prospectuses of each of the
Funds do permit the use of other investments and may make use of such
alternatives in the future. In addition, as described in the prospectuses for
USL, UGA and UHN, the General Partner may require an Authorized Purchaser to
enter into or arrange for a block trade, exchange for physical or exchange for
swap, or other over-the-counter energy transaction (through itself or a
designated acceptable broker) with the Fund for the purchase of a number and
type of futures contracts at the closing settlement price for such contracts
on the purchase order date.
Although USCF believes that the use of exchange-traded futures, such as
ones listed on NYMEX, present only a very small counter-party risk due to the
fact that the trades are cleared through an exchange-related clearing house,
there are other substantial risks. Investors are advised to read the
prospectuses of the Funds for a more detailed discussion of the risks of
investing in the Funds.
The United States Oil Fund, LP (ticker: USO), the United States Natural
Gas Fund, LP (ticker: UNG), the United States 12 Month Oil Fund, LP
(ticker: USL), the United States Gasoline Fund, LP (ticker: UGA), and the
United States Heating Oil Fund, LP (ticker: UHN) are distributed by ALPS
Distributors, Inc.
Note: Investors should read the prospectus for USO, UNG, USL, UGA, and UHN
for more complete information about these securities, including risks,
expenses, and other important terms. In addition, there can be no guarantee
that USO, UNG, USL, UGA, or UHN will be able to achieve their investment
goals.
Commodities and futures generally are volatile and may not be suitable for
all investors
The fund is speculative and involves a high degree of risk. An investor
may lose all or substantially all of an investment in the fund"; "The fund is
not a mutual fund or any other type of Investment Company within the meaning
of the Investment Company Act of 1940, as amended, and is not subject to
regulation thereunder.
This material must be accompanied or preceded by a prospectus, please
click the below links for a prospectus pertaining to each fund.
http://www.unitedstatesgasolinefund.com/PDFS/UGA-Prospectus.pdf
http://www.unitedstatesoilfund.com/pdfs/uso-prospectus.pdf
http://www.unitedstates12monthoilfund.com/pdfs/usl-prospectus.pdf
http://www.unitedstatesnaturalgasfund.com/PDFS/UNG-Prospectus.pdf
http://www.unitedstatesheatingoilfund.com/PDFS/UHN-Prospectus.pdf
For an additional copy of the Prospectus contact: ALPS Distributors, Inc.,
1290 Broadway, Suite 1100, Denver, Colorado 80203 or call 1.800.920.0259.
SOURCE United States Commodity Funds LLC
Katie Rooney, Registered representative of ALPS Distributors, Inc.,
+1-818-206-8148, krooney@unitedstatesoilfund.com, for United States Commodity
Funds LLC
