Money Rehab with Nicole Lapin - Gas Prices Are About To Go Up. Here's How To Save!

Episode Date: June 8, 2023

We'll be honest, we have some bad news: gas prices are going to jump in July. Nicole explains the change, and how— despite the price hikes— you can save at the pump.

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's B-O-F-A dot com slash N-E-W pros, P-R-O-S, media. B-O-F-A dot com slash newprosmedia. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. It's time for some money rehab. Earlier this week, oil futures jumped after Saudi Arabia announced that it would cut oil production this July by a million barrels per day for one month, although that window could be extended depending on how oil prices are affected.

More on that in just a second. But first, let's give a shout out to my recent episode with Josh Brown, where we break down the definition of futures. If you need a quick refresher, I link that episode in the show notes. But for this episode, what you need to know is that when oil futures rise, it means that investors think that oil prices will go up. And if oil futures fall, it means that investors think that oil prices will go down. Let's put that back in context. This announcement caused the benchmark for oil futures fall, it means that investors think that oil prices will go down. Let's put that back in context. This announcement caused the benchmark for oil futures to rise 2.5% in just one business day to $78 a barrel.

So to close the loop and apply the quickie explainer I just gave you, this indicates that investors think that cutting oil production in July will make the price of oil go up. And this all makes sense, right? We know this from our laws of supply and demand. With less supply and demand holding steady, prices will rise. And that's exactly what Saudi Arabia is trying to do, stabilize but ultimately drive up oil prices. This means that Americans can expect to see gas prices rise at the pump again. This announcement from Saudi Arabia is a literal doubling down of an announcement made in April when the kingdom pledged to cut oil production by 500,000 barrels a day.

This increased oil prices a bit. The price of oil rose to nearly $85 a barrel in April, but that was short-lived, and oil prices have been below $80 for about a month now. This has translated to lower prices at the gas pump, yay, and curbing inflation in Europe, also yay. So good news for Europeans and drivers alike, but not such great news for Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the United Arab Emirates, and Venezuela, aka the Organization of the Petroleum Exporting Countries, aka OPEC. Low oil prices were at the top of the agenda for last weekend's

OPEC meeting that Bloomberg described as fraught. The big solution, at least for now, is Saudi Arabia slowing down their oil production. We can all agree that decreasing output by a million units of anything is a lot, but it's especially consequential in context. Right now, Saudi Arabia produces 10 million barrels of oil a day. In other words, their pledge to cut production by a million barrels means that they're cutting their output by 10%. That might not sound like a lot, but in business, a 10% reduction in output is ginormous. As the Wall Street Journal argues, this big move signals that Saudi Arabia is so dedicated to propping up oil prices that the kingdom is willing to sacrifice market share.

Another rarity in business. Now, you might be getting some pre-deja vu from the outbreak of the Russia-Ukraine war when gas prices went insane. I remember gas prices hitting more than $8 a gallon here in LA. When that happened, I put together a money rehab episode, yes, my coping mechanism, with five lesser known tips for saving money on gas. As we brace ourselves for higher gas prices now, I would say get to know and love these strategies. Number one, make Wednesday gas day. Wednesday is typically the best day to fill up for less. Prices tend to rise on Thursday in anticipation of weekend travel. A study found that refueling on Tuesday or Wednesday instead of

the weekend saved eight or nine cents a gallon, saving more than 60 bucks on average a year. In this economy, I'll take it. Number two, early birds get the deal. Gas station owners tend to hike prices after 9 a.m. or so once they've had time to check out the prices at competing stations. Number three, don't top off. You know when you're filling up your tank and you hear that first click? You might be tempted to double check the nozzle and give your tank a little extra squeeze. But don't. Quit while you're ahead. That little extra squeeze is likely to evaporate or

splash out. And make sure your gas cap is on extra tight so none of your fuel escapes as fumes. One in every five people have loose, damaged, or missing gas caps causing 150 million gallons of gas to vaporize every year. Not only is a tight gas cap good for your wallet, but it's also good for the environment. Win-win. Number four, pay with cash. Some stations charge you less per gallon when you pay in cash because it means they won't have to pony up for credit card fees. This hack could save you 10 to 15 cents a gallon, which could really add up depending on how often you refuel. Number five, use loyalty programs. See if the station you visit most often has a rewards or loyalty card.

But don't stop there. Some grocery store loyalty programs offer gas rewards, meaning you earn points for shopping at the grocery store, and then you can redeem those points for cash. For today's tip, you can take straight to the bank. If you're looking at traveling this summer, try and do it ASAP. Because we're expecting higher gas prices in July, you can also expect all travel, planes, trains, and automobiles to get more expensive. So if you can,

try and get that summer vacay in this month while gas prices are on our side. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video

content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.