GAS PRICES TOOK another step higher last week—troubling news for the millions of families planning their summer vacations.
It’s already shaping up as a big travel year. An estimated 39.2 million folks hit the road or took a flight over the Memorial Day weekend, according to AAA, up 8.3% from last year. GasBuddy data show the average price for a gallon of regular unleaded was $4.60 over the holiday weekend. Steep? By July 4, that could look cheap.
As inflation continues to run hot, gasoline futures are worth watching. “RBOB gasoline” futures are offered by the CME Group and trade on the New York Mercantile Exchange. Retail investors, like you and me, can play it through an exchange-traded fund: United States Gasoline Fund LP (symbol: UGA).
Gasoline futures have more than doubled over the past six months. When pump prices go up, folks are displeased—consumer sentiment, as measured by the University of Michigan’s survey, is at its lowest level in more than a decade. The handwringing will likely grow. Gasoline futures hit a new all-time high as of Friday’s closing price.
The futures settled near $4.25 last week. One rule of thumb: Add 90 cents to arrive at the expected average retail price. While the current national average is $4.82, drivers in California are shelling out $6.30 and prices might approach $7 later this summer.
What to do? The usual litany of tips is out there: Tackle multiple errands whenever you take the car out, keep your tires at the right air pressure, drive less aggressively, use a gas rewards credit card and the like. But in reality, these tips will likely generate small monthly savings. Instead, if you want to save money, focus on bigger expenses—like investment fees, taxes and health insurance.