Lock In Low Gas Prices

Oil has declined nearly 66% from its peak closing price of $145.29 on July 3rd to its closing low of $49.62 on November 20th.  With gas prices down significantly since then, drivers no longer dread filling up at the pumps like they did just a couple of months ago. 

We recently came across a good article highlighting a simple way to lock in low gas prices.  The US Gasoline Fund (UGA) is an ETF that tracks the price of gasoline futures in the US.  If you want to go to the pump and not even care what gas prices are, you can buy the same dollar amount of UGA that you would normally spend on gas each year based on the current price of gas.  If gas prices go up and you're paying more at the pump, your UGA will also be going up by a similar amount.  If gas prices go down, your UGA will also go down, but you'll be paying less at the pump as well.

 

Comments

[Scott Gray]

Thanks for the great information! Is there also an ETF that tracks the cost of electricity? Living in Texas, a deregulated state for electricity, the kWh rate, fuel sur-charges or adjustments have swung wildly over the past year and does not look to stabilize anytime soon.

Thanks Again!

Scott