FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-02736
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ADAMS NATURAL RESOURCES FUND, INC.
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(Exact name of registrant as specified in charter)

500 East Pratt Street, Suite 1300, Baltimore, Maryland 21202
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(Address of principal executive offices)

Lawrence L. Hooper, Jr.
Adams Natural Resources Fund, Inc.
500 East Pratt Street, Suite 1300
Baltimore, Maryland 21202
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(Name and address of agent for service)

Registrant's telephone number, including area code: (410) 752-5900
Date of fiscal year end: December 31
Date of reporting period: June 30, 2016

Item 1. Reports to Stockholders.

ADAMS NATURAL RESOURCES FUND

SEMI-ANNUAL REPORT

JUNE 30, 2016

LETTER TO SHAREHOLDERS

Dear Fellow Shareholders,

After enduring market turbulence for most of the period, U.S. equity markets finished the first half of 2016 slightly higher. Similar to last year, volatility was driven by elevated economic uncertainty and global macro events.

The first half uncertainty was punctuated in the fourth week of June when Britain held its referendum vote and elected to leave the European Union. The vote took markets by surprise, triggering a wave of selling around the world. Global financial markets lost $3 trillion during the trading sessions after the vote, marking the biggest two-day sell-off on record. However, over the following few days, the markets recovered most of the decline as “Brexit” fears abated and the currency market stabilized.

Similar volatility was experienced earlier in the year as the S&P 500 declined 9% in the first three weeks of January. Fears of an extended slowdown in China and decelerating economic growth in the U.S. led to the sharp decline. These worries faded and, by the end of March, the S&P 500 returned to its starting point for the year. Equity markets continued to move higher in the second quarter, reacting to the delay of anticipated interest rate hikes by the Fed and to signs of economic stability. But lackluster corporate earnings stalled the market’s advance. While surpassing expectations, reported earnings for the S&P 500 declined 7%, as weak earnings results in the Materials and Energy sectors weighed on total performance.

Despite the Energy sector’s earnings decline, stock prices moved up in response to a higher oil price. After dropping to $26 per barrel in February, crude oil prices rebounded, reaching a high of $51 per barrel in June. Markets began to reflect a rebalancing of supply and demand. Reported data indicated that global supply is declining, especially in the United States. Unforeseen events also influenced the market. A massive wildfire in Canada led to the closure of fields and facilities, curtailing production significantly. At the peak, total outages in Canada exceeded one million barrels per day. Geopolitical issues also contributed to moderating supply as continued attacks on pipelines in Nigeria decimated its oil production. While both events are expected to be temporary, they did highlight a tighter supply/demand environment.

The Dow Jones U.S. Oil & Gas Index advanced 15% in the first six months of the year, exceeding the 4% return of the broader market S&P 500. Within the sector, integrated oil & gas companies returned 18% while exploration & production companies advanced 17%. Equipment & services stocks rose 10%. Although not as strong as the Energy sector, the Dow Jones U.S. Basic Materials Index increased 9%.

Pump prices for gasoline reflected the move in crude oil but still reside near 10-year lows, supporting continued growth in demand. Within refining, we adjusted our holdings to take advantage of the strong gasoline market. We favor companies with refinery flexibility to maximize gasoline production as needed to accommodate demand. We also prefer companies that operate refineries in locations with access to a variety of crude suppliers, substantial existing infrastructure, and the most options for end-market distribution. To this end, we initiated a position in PBF Energy, a company that through recent acquisitions has emerged as one of the largest independent refiners. PBF’s asset base has the ability to process crudes of different qualities, geographic diversity, and higher-than-average gasoline yield. We also added to our positions in Valero Energy and Marathon Petroleum. Valero is the largest and most diverse refiner in the segment. In addition to attractive geographic diversity and high exposure to the gasoline market, new management has exhibited capital discipline, which has yielded above-average

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LETTER TO SHAREHOLDERS (CONTINUED)

cash returns to shareholders. Recent underperformance of Marathon Petroleum following an acquisition provided an opportunity to increase our position. The company has a strong, strategically located refining system as well as the flexibility to maximize margins through a sophisticated logistics network and its retail business.

M&A activity often provides a source of return. This was the case in the Materials sector. Monsanto rose substantially when Bayer made an offer to buy the company. While indicating a willingness to discuss a merger, the company officially rejected a $122 per share bid. While we continue to like Monsanto, we reduced our overweight position in response to the move higher in the stock and uncertainty regarding the outcome of the negotiations.

For the six months ended June 30, 2016, the total return on the Fund’s net asset value (“NAV”) per share (with dividends and capital gains reinvested) was 11.1%. This compares to total returns of 15.0% for Dow Jones U.S. Oil & Gas Index, 8.6% for Dow Jones U.S. Basic Materials Index, and 21.8% for Lipper Global Natural Resources Funds Index over the same time period. The total return on the market price of the Fund’s shares for the period was 14.6%.

For the twelve months ended June 30, 2016, the Fund’s total return on NAV was -6.8%. Comparable returns for Dow Jones U.S. Oil & Gas Index, Dow Jones U.S. Basic Materials Index, and Lipper Global Natural Resources Funds Index were -6.6%, -3.6%, and -3.1%. The Fund’s total return on market price was -3.0%.

During the first half of this year, the Fund paid distributions to shareholders in the amount of $5.6 million, or $.20 per share, consisting of $.03 net investment income and $.05 long-term capital gain, realized in 2015, and $.12 of net investment income realized in 2016, all taxable in 2016. On July 13, 2016, an additional net investment income dividend of $.10 per share was declared for payment on September 1, 2016. These constitute the first three payments toward our annual 6% minimum distribution rate commitment.

By order of the Board of Directors,

Mark E. Stoeckle

Chief Executive Officer

July 13, 2016

Disclaimers

This report contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Several factors that could materially affect the Fund’s actual results are the performance of the portfolio of stocks held by the Fund, the conditions in the U.S. and international financial markets, the price at which shares of the Fund will trade in the public markets, and other factors discussed in the Fund’s periodic filings with the Securities and Exchange Commission.

This report is transmitted to the shareholders of the Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in the report. The rates of return will vary and the principal value of an investment will fluctuate. Shares, if sold, may be worth more or less than their original cost. Past performance is no guarantee of future investment results.

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PORTFOLIO HIGHLIGHTS

June 30, 2016

(unaudited)

Ten Largest Equity Portfolio Holdings

Industry Weightings

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STATEMENT OF ASSETS AND LIABILITIES

June 30, 2016

(unaudited)

The accompanying notes are an integral part of the financial statements.

4

STATEMENT OF OPERATIONS

Six Months Ended June 30, 2016

(unaudited)

The accompanying notes are an integral part of the financial statements.

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STATEMENTS OF CHANGES IN NET ASSETS

The accompanying notes are an integral part of the financial statements.

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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

Adams Natural Resources Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940 (“1940 Act”) as a non-diversified investment company. The Fund is an internally-managed closed-end fund specializing in energy and other natural resources stocks. The investment objectives of the Fund are preservation of capital, the attainment of reasonable income from investments, and an opportunity for capital appreciation.

1.    SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation—The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for investment companies, which require the use of estimates by Fund management. Management believes that estimates and valuations are appropriate; however, actual results may differ from those estimates and the valuations reflected in the financial statements may differ from the value the Fund ultimately realizes.

Affiliated Companies—Adams Diversified Equity Fund, Inc. (ADX), a diversified, closed-end investment company, owns 8% of the Fund’s outstanding shares and is, therefore, an “affiliated company” as defined by the 1940 Act.

Expenses—The Fund shares personnel, systems, and other infrastructure items with ADX and Adams Funds Advisers, LLC (AFA), an ADX-affiliated investment adviser to external parties, and is charged a portion of the shared expenses. To protect the Fund from potential conflicts of interest, policies and procedures are in place covering the sharing of expenses among the entities. Expenses that are not solely attributable to the Fund are allocated in accordance with the Fund’s policy, which dictates that such expenses be attributed to each Fund based on the relative net assets of the Funds, or, in the case of AFA, the net assets under management. Investment research compensation and benefits are attributed to each entity based on the relative market values of the portfolio securities covered in each respective entity. Expense allocations are updated quarterly, except for those related to payroll, which are updated annually.

For the period ended June 30, 2016, expenses of $1,093,912 and $2,731 were charged to ADX and AFA, respectively, in accordance with the Fund’s expense sharing policy. There are no amounts due to, or due from, ADX or AFA as of June 30, 2016.

Investment Transactions, Investment Income, and Distributions—The Fund’s investment decisions are made by the portfolio management team with recommendations from the research staff. Policies and procedures are in place covering the allocation of investment opportunities among the Fund, ADX, and AFA to protect the Fund from potential conflicts of interests. Investment transactions are accounted for on the trade date. Realized gains and losses on sales of investments are recorded on the basis of specific identification. Dividend income and distributions to shareholders are recognized on the ex-dividend date. Interest income is recognized on the accrual basis.

Valuation—The Fund’s financial instruments are reported at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund has a Valuation Committee (“Committee”) to ensure that financial instruments are appropriately priced at fair value in accordance with GAAP and the 1940 Act. Subject to

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NOTES TO FINANCIAL STATEMENTS (CONTINUED)

oversight by the Board of Directors, the Committee establishes methodologies and procedures to value securities for which market quotations are not readily available.

GAAP establishes the following fair value hierarchy that categorizes the inputs used to measure fair value:

Investments in securities traded on national security exchanges are valued at the last reported sale price as of the close of regular trading on the primary exchange on the day of valuation. Over-the-counter and listed securities for which a sale price is not available are valued at the last quoted bid price. Money market funds are valued at net asset value. These securities are generally categorized as Level 1 in the hierarchy.

Short-term investments (excluding money market funds) are valued at amortized cost, which approximates fair value. Total return swap agreements are valued using independent, observable inputs, including underlying security prices, dividends, and interest rates. These securities are generally categorized as Level 2 in the hierarchy.

At June 30, 2016, the Fund’s financial instruments were classified as follows:

There were no transfers between levels during the period ended June 30, 2016.

2.    FEDERAL INCOME TAXES

No federal income tax provision is required since the Fund’s policy is to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable income and gains to its shareholders. Additionally, management has analyzed and concluded that tax positions included in federal income tax returns from the previous three years that remain subject to examination do not require any provision. Any income tax-related interest or penalties would be recognized as income tax expense. As of June 30, 2016, the identified cost of securities for federal income tax purposes was $502,861,436 and net unrealized appreciation aggregated $139,734,740, consisting of gross unrealized appreciation of $208,441,687 and gross unrealized depreciation of $68,706,947.

Distributions are determined in accordance with the Fund’s annual 6% minimum distribution rate commitment, based on the Fund’s average market price, and income tax regulations, which may differ from generally accepted accounting principles. Such differences are primarily related to the Fund’s retirement plans and equity-based compensation. Differences that are permanent are reclassified in the capital accounts of the Fund’s financial statements and have no impact on net assets.

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NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3.    INVESTMENT TRANSACTIONS

Purchases and sales of portfolio investments, other than short-term investments and derivative transactions, during the period ended June 30, 2016 were $56,492,032 and $54,221,702 respectively.

4.    CAPITAL STOCK

The Fund has 5,000,000 authorized and unissued preferred shares, $0.001 par value.

During the period ended June 30, 2016, the Fund issued 148 shares of its Common Stock at a weighted average price of $18.03 per share as dividend equivalents to holders of deferred stock units and restricted stock units under the 2005 Equity Income Compensation Plan.

On December 22, 2015, the Fund issued 702,985 shares of its Common Stock at a price of $17.93 per share (the average market price on December 9, 2015) to shareholders of record on November 25, 2015, who elected to take stock in payment of the year-end distribution from 2015 capital gain and investment income. During 2015, 1,311 shares were issued at a weighted average price of $20.15 per share as dividend equivalents to holders of deferred stock units and restricted stock units under the 2005 Equity Income Compensation Plan.

The Fund may purchase shares of its Common Stock from time to time, in accordance with parameters set by the Board of Directors, at such prices and amounts as the portfolio management team may deem appropriate. Transactions in Common Stock for 2016 and 2015 were as follows:

5.    RETIREMENT PLANS

Defined Contribution Plans—The Fund sponsors a qualified defined contribution plan for all employees with at least six months of service and a nonqualified defined contribution plan for eligible employees to supplement the qualified plan. The Fund expensed contributions to the plans in the amount of $180,888, a portion thereof based on Fund performance, for the period ended June 30, 2016.

Defined Benefit Plans—The Fund completed the termination of its qualified defined benefit plan in 2015 and has no further defined benefit obligations.

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NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Items impacting the Fund’s pension cost and accumulated other comprehensive income were:

6.    EQUITY-BASED COMPENSATION

The Fund’s 2005 Equity Incentive Compensation Plan, adopted at the 2005 Annual Meeting and reapproved at the 2010 Annual Meeting, expired on April 27, 2015. Restricted stock awards granted prior to the Plan’s expiration remain outstanding as of June 30, 2016 and vest on various dates through September 2, 2018, provided the service condition set forth in the award at grant is satisfied. Also outstanding are restricted stock units granted to nonemployee directors that are 100% vested, but payment of which has been deferred by the election of the director.

Outstanding awards were granted at fair market value on grant date (determined by the average of the high and low price on that date). Awards earn an amount equal to the Fund’s per share distribution, payable in either cash (employees) or reinvested shares (non-employee directors). Reinvested shares are fully vested and paid concurrently with the payment of the original share grant. A summary of the activity related to nonvested restricted shares and restricted stock units for the period ended June 30, 2016 is as follows:

Compensation cost is based on the fair market value of the award on grant date and recognized on a straight-line basis over the vesting period. Any compensation cost recognized related to an award that is subsequently forfeited due to unmet service conditions is reversed. Total compensation cost related to equity-based compensation for the period ended June 30, 2016 was $147,562. As of June 30, 2016, the Fund had

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NOTES TO FINANCIAL STATEMENTS (CONTINUED)

unrecognized compensation cost of $316,408, a component of additional capital surplus, related to nonvested awards that will be recognized over a weighted average period of 1.14 years. The total fair value of awards vested and issued during the period ended June 30, 2016 was $185,636.

7.    OFFICER AND DIRECTOR COMPENSATION

The aggregate remuneration paid during the period ended June 30, 2016 to officers and directors amounted to $2,396,896, of which $220,042 was paid to directors who were not officers. These amounts represent the taxable income to the Fund’s officers and directors and, therefore, differ from the amounts reported in the accompanying Statement of Operations that are recorded and expensed in accordance with GAAP.

8.    PORTFOLIO SECURITIES LOANED

The Fund makes loans of securities to approved brokers to earn additional income. It receives as collateral cash deposits valued at 102% of the value of the securities on loan. The market value of the loaned securities is calculated based upon the most recent closing prices and any additional required collateral is delivered to the Fund on the next business day. Cash deposits are placed in a registered money market fund. The Fund accounts for securities lending transactions as secured financing and retains a portion of the income from lending fees and interest on the investment of cash collateral. The Fund also continues to receive dividends on the securities loaned. Gain or loss in the fair value of the securities loaned that may occur during the term of the loan will be for the account of the Fund. At June 30, 2016, the Fund had no securities on loan and held no cash collateral. The Fund is indemnified by the Custodian, serving as lending agent, for the loss of loaned securities and has the right under the lending agreement to recover the securities from the borrower on demand.

9.    OPERATING LEASE COMMITMENTS

The Fund leases office space and equipment under operating lease agreements expiring at various dates through the year 2026. The Fund recognized rental expense of $93,897 for the period ended June 30, 2016, and its minimum rental commitments are as follows:

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FINANCIAL HIGHLIGHTS

12

SCHEDULE OF INVESTMENTS

June 30, 2016

(unaudited)

13

SCHEDULE OF INVESTMENTS (CONTINUED)

June 30, 2016

(unaudited)

Notes:

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CHANGES IN PORTFOLIO SECURITIES

During the six months ended June 30, 2016

(unaudited)

15

HISTORICAL FINANCIAL STATISTICS

(unaudited)

ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders was held on April 14, 2016. The following votes were cast for directors: