Just this past August I paid over $3/gallon for gasoline.  Yesterday I filled up for $1.89/gallon.  I was wondering about how I might lock into this relatively low price level.  I can't predict the future, but I feel that gas under $2/gallon isn't going to last long.

Assuming that there aren't shortages, I'm really only concerned about keeping up with the price. So instead of incurring the costs of stockpiling gasoline in my backyard, I found an easy hedge against rising gas prices. 

There is an ETF (Exchange Traded Fund) called USO (United States Oil).  It pretty much follows the price of oil.  It holds various types of oil, gas, and petroleum based assests.  You can buy it like any other stock.  I have an etrade account and it costs me $5 to buy and then $5 to sell. The annual fund expenses are 0.5%.

I figure that I spend about $2500/year on gasoline.  So if I buy $10,000 worth of USO I'll effectively be buying 4 years worth of gas at today's prices.

When gas goes up to $3/gallon and everyone is screaming, I'll be paying the same but I'll have my USO stock go up in value to cover the difference.  It'll be like having my own strategic reserve, but I won't have that smelly gas on my hands.