All About The Gasoline ETF (UGA)
Without gasoline, many of us could not go on with our daily routines. And because of our high level of dependence, gasoline has become one of the most important commodities in the world. Gasoline, more specifically RBOB Gasoline, is a petroleum-derived liquid mixture and its usage in the transportation industry in the U.S. accounts for over 40% of global gasoline demand. The price of gasoline can be affected by a multitude of factors, including the health of the global economy, geopolitical tensions, and even changing tax policies across the globe [for more gasoline news and analysis subscribe to our free newsletter].
Can Commodity ETFs Hedge Your Everyday Expenses?
Although the concept of “hedging” has been stretched, abused, and otherwise manipulated over the years, it is nevertheless a very important process for many companies. Commodity producers use forwards and futures contracts to help ensure a certain level of cash flow, and corporate commodity consumers use hedging to help control costs. So here’s a thought – can regular people use commodity investment products like ETFs to hedge some of their everyday costs of living?
How To Profit From The Gasoline Rally
While many have their sights set on silver’s impressive run, or crude oil’s volatility, another commodity has been surging. Gasoline RBOB futures have amassed a healthy momentum in recent weeks, as this fossil fuel continues test the upper boundaries of its price limits. In fact, the trailing three months have seen RBOB futures surge by nearly 50%, spawning from a number of supply issues, including a refinery explosion last week that thankfully claimed no lives. Low inventories continue to propel RBOB futures while crude oil looks to regain the ground it lost since its recent run at $100 [for more gasoline news and analysis subscribe to our free newsletter].
ETFs to Hedge Rising Prices at the Pump
If there is one economic item that unites Americans in frustration, it’s the rising price of gasoline. The fuel for our vehicles has become a necessity for many of us, so price hikes hit hard in the wallet, affecting purchases of other items. So why are gasoline prices on a long-term upward slope? Some Americans point the finger at greedy oil companies, but that is not the answer. Yes, refining margins do play a role in the price of gasoline, but there is one critical factor behind higher gasoline prices: the rising price of crude oil [for more commodity news subscribe to our free newsletter].
Ultimate Guide To RBOB Gasoline Investing
Gasoline is one of the most widely-known and used commodities worldwide. It is primarily utilized for fuels, but can be also used for various reasons like a solvent to dilute paints. While we refer to the liquid as gasoline here in the states, many other parts of the world know it by the term petrol, or sometimes petrogasoline. From a chemical standpoint, this low-density fuel is very volatile, not only because of its natural makeup, but also because of the numerous additives that can be mixed in. Some of these additives include lead, ethanol, and dye [see also The Guide To The Biggest Companies In Every Major Commodity Sector].
