On Tuesday, U.S. drivers faced the steepest pump prices in about four years as the Iran conflict and stalled diplomacy kept crude markets tight. The average cost of a gallon of gasoline hit $4.23, a level not seen since April 2022, according to AAA.
Pump prices are up more than 40% since the fighting began in late February. United States Gasoline ETF (NYSE:UGA), which allows investors to make a direct play on gasoline, gained about 2% on Tuesday.
Why Gas Prices Are Surging Again
The milestone came as negotiations around the reopening of the Strait of Hormuz and constraints tied to Iran’s nuclear program remained stuck. This will continue to disrupt oil flows through the Hormuz, which handles about one-fifth of global shipments, and send oil prices soaring.
Oil is doing most of the heavy lifting behind the jump, since crude makes up about 51% of what drivers pay at the pump, according to the CBS report. West Texas Intermediate (WTI) prices jumped to $100 per barrel, while Brent is hovering around $106 per barrel.
In a note dated April 26, Goldman Sachs commodity analyst Daan Struyven upgraded the firm’s 2026 fourth-quarter Brent forecast from $80 to $90 and West Texas Intermediate from $75 to $83.
UGA in Focus
UGA has an average daily trading volume of about 115,000 shares, suggesting that investors have to pay extra in the form of a wide bid/ask spread beyond the annual fee of 1.02% per year. The fund has $126.7 million in assets under management (AUM) and has risen 84% since the start of the year.
The Trend Should Be Your Friend
Because UGA rolls from one futures contract to another, it is exposed to roll yield. Roll yield is positive when the futures market is in backwardation (the front-month contract is higher than the next-month contract) and negative when the futures market is in contango (the front-month contract is lower than the next-month contract).
Benzinga Edge Stock Rankings indicate that UGA has a Momentum score in the 95th percentile. It maintains a strong price trend in the short, medium and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: hxdbzxy via Shutterstock
Recent Comments