How low will gas prices in California get this year?
Short Answer
Both the model and the market expect gas prices in California to fall below $4.10 this year, with no compelling evidence of mispricing.
1. Executive Verdict
- California's gasoline demand is decreasing despite rising vehicle miles traveled.
- Increasing fuel efficiency and EV adoption drive sustained downward pressure.
- PBF Energy Martinez refinery primarily focuses on repairs throughout 2026.
- California mandates a full retail switch to winter-blend gasoline by November 1st.
- West Coast gasoline inventories show a slight build, impacting supply dynamics.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Below $4.10 | 18.0% | 10.5% | Market higher by 7.5pp |
| Below $4.00 | 13.0% | 9.3% | Market higher by 3.7pp |
| Below $3.90 | 12.0% | 9.3% | Market higher by 2.7pp |
| Below $3.80 | 16.0% | 9.3% | Market higher by 6.7pp |
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This analysis covers the prediction market "How low will gas prices in California get this year?", which appears to be asking if the minimum price will reach $4.10 or lower. The market chart displays a distinct downward trend since its inception. The probability began at a high of 25.0% and has since declined to its current level of 18.0%. The most significant movement occurred early in the trading period, with a sharp drop from the 25.0% starting price to the lower end of its trading range. Lacking specific news or external context, the reason for this initial, sharp decline in confidence is not apparent from the provided information. The price has since stabilized, trading within a relatively narrow 10-point range.
The market has established a clear resistance level at the 25.0% starting price, which was quickly rejected. A potential support level has formed near the 15.0% mark, representing the floor of the trading activity so far. The current price of 18.0% is trading closer to this support level than the initial high, indicating sustained skepticism. Total volume stands at 528 contracts, which suggests a moderate level of engagement. Overall, the price action reflects a shift in market sentiment from initial moderate optimism to a more pessimistic outlook. The market currently assigns a low probability (18.0%) to the proposition that California gas prices will fall to the $4.10 threshold this year.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: Below $3.90
📈 April 21, 2026: 8.0pp spike
Price increased from 2.0% to 10.0%
What happened: No supporting research available for this anomaly.
Outcome: Below $3.80
📉 April 18, 2026: 16.0pp drop
Price decreased from 24.0% to 8.0%
What happened: No supporting research available for this anomaly.
Outcome: Below $4.00
📉 April 17, 2026: 8.0pp drop
Price decreased from 10.0% to 2.0%
What happened: No supporting research available for this anomaly.
4. Market Data
Contract Snapshot
This market resolves to "Yes" if the average regular gas price for California is strictly lower than $4.10 by December 31, 2026, as verified by AAA; otherwise, it resolves to "No." The market opened on January 6, 2026, and will close either immediately after the outcome occurs (at the next 10:15 am, 11 am, or 3 pm ET) or by December 31, 2026, at 9:55 am EST if the event doesn't happen sooner. Payouts are projected one hour after closing.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Below $4.10 | $0.19 | $0.83 | 18% |
| Below $3.80 | $0.12 | $0.91 | 16% |
| Below $4.00 | $0.18 | $0.87 | 13% |
| Below $3.90 | $0.12 | $0.97 | 12% |
Market Discussion
The market currently assigns low probabilities (12-18%) to California's average gas prices falling below $4.10, $4.00, or $3.90 this year, with the majority of traders betting against these outcomes. One "Yes" argument highlighted user-reported prices on GasBuddy as low as $3.39-$3.69 in specific rural or competitive stations, suggesting it's possible for the statewide average to drop. However, the market consensus leans towards gas prices not reaching these lower thresholds.
5. What are the California refinery maintenance schedules and utilization for 2026?
| PBF Martinez Repairs Completion | Q2 2026 [^] |
|---|---|
| PBF Martinez Full Operations | Q3 2026 [^] |
| PADD 5 Refinery Utilization (May 10, 2024) | 89.2% [^] |
For the remainder of 2026, PBF Energy Martinez primarily focuses on repairs. The PBF Energy Martinez renewable fuels facility is scheduled to complete repairs during the second quarter of 2026, with full operations projected to resume in the third quarter of 2026, following an incident in December 2023 [^]. The timeline for the full restart of the renewable fuels conversion project also extended into early 2026 [^]. While PBF Energy has announced significant turnaround work across its refining system in 2026, no additional planned turnaround work for its Martinez facility beyond the mentioned repairs and restart is detailed in the available sources for the remainder of 2026 [^].
Chevron Richmond maintenance details are unspecified in available research. The provided research does not specify any planned or unplanned maintenance schedules for Chevron Richmond for the remainder of 2026. Generally, U.S. refineries were preparing for a heavy slate of maintenance in 2026, impacting a significant portion of capacity [^].
PADD 5 refinery utilization remains slightly below the five-year average. For the week ending May 10, 2024, the PADD 5 (West Coast) refinery operable capacity utilization rate was 89.2% [^]. This rate is below the five-year average utilization for the corresponding week, which stands at 90.7% [^]. This indicates that, for this recent period, PADD 5 refineries were operating at a slightly lower capacity compared to their average performance over the past five years during the same seasonal timeframe.
6. Why is California Gasoline Demand Decreasing Amidst Rising VMT?
| CA Gasoline Demand Change (YoY) | Decreased by 2.3% (week ending May 10, 2024) [^] |
|---|---|
| CA Vehicle Miles Traveled Change (YoY) | Increased by 1.9% (March 2024) [^] |
| Trend Implication | More travel with less gasoline consumption [^] |
California's finished motor gasoline demand decreased year-over-year. According to the California Energy Commission (CEC), the state's finished motor gasoline product supplied for the week ending May 10, 2024, was approximately 8.5 million barrels. This figure represents a decrease of about 2.3% compared to the same week in the previous year [^], indicating persistent downward pressure on gasoline consumption in the state.
Vehicle miles traveled increased, diverging from gasoline demand trends. Caltrans data shows California's Vehicle Miles Traveled (VMT) for March 2024 reached approximately 27.5 billion miles, an increase of about 1.9% compared to March 2023 [^]. This growing divergence, with rising VMT and falling gasoline demand, suggests that Californians are traveling more but consuming less gasoline. This pattern aligns with increased adoption of more fuel-efficient vehicles and the growing market penetration of electric vehicles (EVs) in California, which collectively reduce overall gasoline consumption despite an increase in total miles driven [^]. This ongoing shift reflects evolving consumer choices and broader efforts affecting transportation energy use within the state.
7. When Does California Switch to Winter-Blend Gasoline and Its Cost Impact?
| Mandated Winter-Blend Retail Date | November 1st [^] |
|---|---|
| Earliest Winter-Blend Retail Sales | October 1st (when permitted) [^] |
| Summer-Blend Cost Premium | 10 to 25 cents per gallon more than winter-blend [^] |
California mandates a full retail switch to winter-blend gasoline by November 1st. Retailers in California are typically required to sell exclusively winter-blend gasoline starting November 1st [^]. While the California Air Resources Board (CARB) may permit refiners and terminals to begin supplying winter-blend fuel as early as late September, with retail sales allowed from October 1st, the official date for the complete retail transition for retailers remains November 1st [^].
Winter-blend gasoline is typically 10 to 25 cents cheaper per gallon. Summer-blend gasoline is more expensive to produce due to its stricter specifications, which results in higher pump prices. The shift to summer-blend fuel usually increases prices by an estimated 10 to 25 cents per gallon compared to winter-blend [^]. Additional analyses corroborate this range, often indicating an increase of 10 to 15 cents per gallon [^]. Consequently, winter-blend gasoline is generally 10 to 25 cents per gallon less costly than summer-blend.
8. How Do West Coast Gasoline Inventories Compare Historically?
| Current Inventory (Week Ending May 24, 2024) | 28.9 million barrels [^] |
|---|---|
| Weekly Change | +0.2 million barrels (build) [^] |
| 5-Year Seasonal Low | 27.8 million barrels (week ending May 26, 2023) [^] |
West Coast gasoline inventories show a slight build this week. For the week ending May 24, 2024, West Coast (PADD 5) gasoline inventories were reported at 28.9 million barrels [^]. This marks an increase of 0.2 million barrels from the previous week's total of 28.7 million barrels, indicating a build in regional supply relative to demand over the reported period [^].
Current inventory levels fall within the typical 5-year range. The reported 28.9 million barrels are above the 5-year seasonal low of 27.8 million barrels, which occurred in the week ending May 26, 2023. However, current stocks remain below the 5-year seasonal high of 32.0 million barrels, recorded in the week ending May 22, 2020 [^].
9. What Is the Current LA-CARB vs. NYMEX RBOB Gasoline Spread?
| Current LA-CARB vs. NYMEX RBOB Spread | +$0.3500 per gallon [^] |
|---|---|
| Historical Average Spread (Post-Summer) | Not available in provided sources [^] |
| LA-CARB Gasoline Future Market | Price of CARB-compliant gasoline delivered in Los Angeles (ICE) [^] |
The current spread shows LA-CARB gasoline trading at a premium. The price differential between Los Angeles CARBOB (LA-CARB) gasoline futures and NYMEX RBOB gasoline futures is approximately +$0.3500 per gallon [^]. This indicates that LA-CARB gasoline is trading at a premium compared to NYMEX RBOB gasoline. The Gasoline Outright - Los Angeles CARBOB Gasoline (OPIS) Future, traded on ICE, represents the price of CARB-compliant gasoline delivered in the Los Angeles area [^]. Conversely, NYMEX RBOB futures serve as a benchmark for the broader U.S. market and are traded on CME Group for delivery in the New York Harbor [^]. This price difference is directly reflected by a dedicated spread swap product for Los Angeles CARBOB Gasoline (OPIS) vs. RBOB Gasoline, which is offered by CME Group [^].
Historical average comparison during the post-summer season is not available. The provided research output does not contain specific data or analysis to compare the current spread to its historical average during the post-summer driving season. The available sources primarily focus on current market quotes and product details for the individual gasoline futures contracts and their associated spread products [^]. Therefore, a direct comparison of the current spread to its historical average for the post-summer driving season cannot be made based on the information provided.
10. What Could Change the Odds
Key Catalysts
Catalyst analysis unavailable.
Key Dates & Catalysts
- Strike Date: December 31, 2026
- Expiration: January 07, 2027
- Closes: December 31, 2026
11. Decision-Flipping Events
- Trigger: Catalyst analysis unavailable.
13. Historical Resolutions
No historical resolution data available for this series.
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