U.S. oil prices have recently climbed above $100 per barrel, causing gasoline prices to reach multi-month highs. According to AAA, the national average for gas peaked at $4.56 per gallon on May 21.
Traders on the prediction market platform Kalshi are forecasting a 71% chance that the average gas price will exceed $4.60 in 2026, with a 57% probability of surpassing $4.80 and over a 40% likelihood of crossing the $5.00 mark. The last record high for gas prices was just over $5 per gallon in June 2022.
The prediction market operates by resolving contracts based on AAA's data regarding gas prices. The recent escalation of tensions between the U.S. and Iran has raised concerns about the Strait of Hormuz, a vital route for global oil supply, contributing to the increase in oil prices. As of Monday, West Texas Intermediate crude futures rose by 3.5% to over $103 per barrel.
Additionally, traders on Kalshi estimate a 50-50 chance that gas prices will remain above $4.25 per gallon on election day, November 3. This situation is critical for investors as sustained high gas prices could influence consumer behavior and overall economic conditions