Author Topic: Using an oil based investment to hedge personal gasoline cost?  (Read 1919 times)

Gone Fishing

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A friend and I were musing over using some sort of investment to hedge against future increases in fuel prices.  Is this even possible?  How would you do it?

chubbybunny

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Re: Using an oil based investment to hedge personal gasoline cost?
« Reply #1 on: March 08, 2016, 07:41:52 AM »
buy an electric car?  stop driving?


protostache

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Re: Using an oil based investment to hedge personal gasoline cost?
« Reply #3 on: March 08, 2016, 07:55:33 AM »
One strategy might be to put enough into a basket of oil majors for the dividend to offset some of your fuel costs. $50,000 in a basket that pays 4% would throw off about $167/mo. Capital gains and dividends both grow based on earnings, so that would hedge against slowly growing fuel prices.

Retire-Canada

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Re: Using an oil based investment to hedge personal gasoline cost?
« Reply #4 on: March 08, 2016, 08:11:52 AM »
buy an electric car?  stop driving?

^^ this and ad in the middle ground of reduce driving mileage and riding a bike. These options have the benefit of reduced environmental impact and better physical health.

Gone Fishing

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Re: Using an oil based investment to hedge personal gasoline cost?
« Reply #5 on: March 08, 2016, 08:19:52 AM »
I appreciate everyone's desire to use a bike as their primary mode of transportation.  Point made, now let's talk about hedging fuel costs using by using a financial instrument.

CoderNate

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Re: Using an oil based investment to hedge personal gasoline cost?
« Reply #6 on: March 08, 2016, 08:25:45 AM »
You could buy WTI futures contracts with rolling expiration for the next 10 years or so.

mizzourah2006

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Re: Using an oil based investment to hedge personal gasoline cost?
« Reply #7 on: March 08, 2016, 08:36:15 AM »
I actually think about my investment in Chevron like this. When gas prices rise, Chevron's earnings will rise and vice versa.