U.S. Gasoline Fund (NYSEArca: UGA) rose to its highest level in nearly four years on Wednesday as gas prices in California jump to all-time records.
The gasoline ETF has rallied over the 20% the past three months to its highest since 2008. Rising gas prices equal pain at the pump and cut into consumer budgets.
Average gas prices in California hit $4.67 a gallon earlier this week, Associated Press reports. [Gasoline ETF Remains Stubbornly High, Squeezing Consumers]
Analysts are calling for a $5 jump in gasoline futures this week amid the spike in California. If the problem spreads to the East coast prices will jump substantially, reports Bill James for Seeking Alpha.
Supply risks in California are temporary and to blame for the record high prices so far. Senator Diane Feinsten is currently investigating all possible factors that are contributing to this high prices, from traders to policy makers and illegal market manipulation. [Gasoline ETF Rises 30% From June Low]
According to AAA, the average price at the pump in California could top off at $4.85 a gallon before leveling off. [Is Gas ETF Past Its Peak?]
U.S. Gasoline Fund
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.