Short Answer

Both the model and the market expect US gas prices to be above $2.879 this week, with no compelling evidence of mispricing.

1. Executive Verdict

  • Unplanned refinery outages reduce East and Gulf Coast capacity.
  • API reported significant draws in US gasoline inventories last week.
  • Escalating geopolitical tensions heighten crude oil supply risk.
  • Commercial traders show intensified bearish hedging in RBOB Gasoline Futures.
  • Significant gasoline arbitrage profit exists from US Gulf Coast to Europe.
  • Robust refinery margins are supported by a stable, bullish crack spread.

Who Wins and Why

Outcome Market Model Why
Above $2.979 3.0% 2.5% Ample supply and stable crude futures are expected to cap prices below this level.
Above $2.899 1.0% 99.0% Consistent consumer demand provides a strong floor for current gas prices.
Above $2.929 89.0% 98.2% Steady refining activity supports prices potentially moving towards this range.
Above $2.879 1.0% 99.5% Baseline crude oil prices ensure pump costs remain firmly above this threshold.
Above $2.959 16.0% 15.5% Modest global oil demand growth limits significant upward price movements this week.

Current Context

US national gas prices remain relatively stable but face upward pressure. As of February 20, 2026, the national average for regular gasoline stands between $2.92 and $2.93 per gallon, marking a slight decrease from the previous week but an increase compared to last month [^]. Though generally lower than the $3.16 recorded a year ago [^], pump prices are widely anticipated to begin their seasonal ascent soon with the approach of spring and the transition to summer-blend gasoline production [^]. Geopolitical tensions, particularly involving the U.S. and Iran, alongside Ukrainian strikes on Russian refineries, are significant factors that could drive up crude oil prices and contribute to market volatility [^]. Domestically, the EIA reported a larger-than-expected 3.2 million barrel draw in national crude oil stocks during the second week of February, indicating tightening supply [^].
Market observers track key data points and anticipate seasonal price increases. Consumers are primarily interested in the current national average price, weekly changes, and year-over-year comparisons [^]. State-by-state prices are also a major focus, with California ($4.50) and Hawaii ($4.40) typically having the highest costs, while Oklahoma ($2.34) and Arkansas ($2.46) feature the lowest [^]. Crude oil prices, such as West Texas Intermediate at $62.30 as of February 17 [^], and U.S. inventory reports from the EIA are closely watched indicators [^]. Experts confirm seasonal trends; AAA spokesman Julian Paredes noted that recent increases in Arizona gas prices are typical for February due to seasonality, increased demand, and refinery maintenance for summer blends [^]. Patrick De Haan of GasBuddy forecasts a significant upward trend of 25 to 65 cents into spring, following an early February bump in prices [^]. The EIA projects the 2026 average retail gasoline price to be just over $2.90 per gallon, approximately 20 cents lower than in 2025, due to expected lower Brent crude prices averaging around $56 per barrel [^]. Upcoming events include the EIA's next weekly retail gasoline report on February 24, 2026, at 4:30 PM EST, and ongoing geopolitical developments [^]. Common concerns include understanding price fluctuations, state variations, the impact of global events, and advice on saving money, such as shopping for the best prices and leveraging gas rewards credit cards [^].

2. Market Behavior & Price Dynamics

Historical Price (Probability)

Outcome probability
Date
The price chart for this market exhibits a distinct and prolonged downward trend. Opening at a 14.0% probability, the contract price has steadily declined, finding a recent floor between 1.0% and 3.0%. The market's all-time high of 25% represents a peak in optimism that has long since faded. The dominant price action is a consistent erosion of confidence in a "YES" outcome, with the price breaking through several prior support levels, including the 4.0% mark noted in historical data, to reach its current low. This movement indicates that over the life of the contract, traders have progressively lowered their expectations for gas prices to reach the $2.959 threshold.
The extremely low current probability of 3.0% appears to be directly influenced by the proximity of the resolution date and the current spot price of gasoline. With the national average at $2.92-$2.93 just days before the market's close, traders are pricing in the high unlikelihood of a nearly 3-cent price jump in such a short timeframe. While the fundamental context highlights several factors that could exert upward pressure, such as geopolitical tensions and seasonal transitions, the market's price action suggests a strong belief that these factors will not manifest as a sufficient price increase before the February 23 resolution. The initial, higher probabilities likely reflected a time when these bullish catalysts were viewed as more impactful or when there was more time for them to influence the outcome.
Trading volume patterns reinforce this bearish sentiment. The total volume of over 77,000 contracts suggests significant market participation, and the sample data indicates that volume has been considerably higher in recent periods at these lower price levels. This increased activity near the price floor signals strong conviction among traders solidifying the "NO" position. Overall, the chart reflects a market that has transitioned from moderate uncertainty to a state of high certainty, with overwhelming sentiment that the national average gas price will fail to reach $2.959 by the specified date.

3. Significant Price Movements

Notable price changes detected in the chart, along with research into what caused each movement.

Outcome: Above $2.929

📈 February 19, 2026: 44.0pp spike

Price increased from 41.0% to 85.0%

What happened: The 44.0 percentage point spike in the "US gas prices this week" prediction market for the "Above $2.929" outcome on February 19, 2026, was primarily driven by traditional market factors coinciding with the actual reported national average gas price [^]. On this date, the national average for a gallon of regular gasoline was reported at $2.929 by AAA [^]. This exact alignment with the prediction market's threshold likely caused a dramatic shift in perceived probability as several news items indicated upward price pressure [^]. Factors contributing to this upward pressure included a significant, unexpected draw in US crude oil, gasoline, and distillate inventories reported by the EIA, alongside rising WTI and Brent crude oil prices, which were partly attributed to increased geopolitical tensions between the US and Iran [^]. Additionally, analysts anticipated a seasonal climb in gas prices due to the approaching spring and the transition to summer-blend gasoline production [^]. There is no evidence from the search results to suggest that specific social media activity from key figures or viral narratives was a direct driver of this particular prediction market movement [^]. Social media activity was mostly irrelevant in directly causing this spike, which appears to be a reaction to the precise alignment of the actual gas price with the market's threshold and broader fundamental market news [^].

📉 February 18, 2026: 22.0pp drop

Price decreased from 55.0% to 33.0%

What happened: The primary driver of the 22.0 percentage point drop in the "US gas prices this week" prediction market for the "Above $2.929" outcome on February 18, 2026, was an analytical post published on Action Network [^]. Tyler Jacobsma, founder of Flowframe.xyz, authored an article on February 18, 2026, at 3:41 PM EST, directly asserting that prediction market contracts betting on US national average gas prices hitting $3.00 by February 28 were "mispriced" and overly optimistic [^]. Jacobsma's analysis, which appeared to coincide with the market movement, provided a fundamental case for lower prices, citing the national average at approximately $2.93 as of February 15, a lack of crude support or demand catalysts, and typical seasonal declines, explicitly advising traders to "Buy NO on 'Above $3.00'." This highly relevant and timely expert commentary likely prompted a significant correction in the prediction market as participants adjusted their positions based on the detailed bearish outlook [^]. Social media was the primary driver [^].

Outcome: Above $2.959

📉 February 17, 2026: 26.0pp drop

Price decreased from 35.0% to 9.0%

What happened: The 26.0 percentage point drop in the "Above $2.959" outcome for the "US gas prices this week" prediction market on February 17, 2026, was primarily driven by traditional news and market fundamentals, indicating expectations of lower retail prices [^]. The U.S [^]. Energy Information Administration (EIA) had, earlier in February, lowered its Short-Term Energy Outlook for U.S [^]. regular gasoline retail prices in 2026 to an average of $2.91 per gallon, falling below the prediction market's threshold [^]. This forecast was reinforced by US gasoline futures dropping to a two-week low of approximately $1.9 per gallon on February 17, coinciding with the prediction market movement and reflecting weaker wholesale prices amidst a global crude oil glut and ongoing diplomatic talks [^]. Social media activity from key figures around this date was either unrelated or suggested factors that would typically increase, rather than decrease, energy prices, making it irrelevant to this specific price decline [^].

4. Market Data

View on Kalshi →

Contract Snapshot

This Kalshi market concerns "US gas prices this week," categorized under "Oil and energy." While the market ID suggests February 23, 2023, the provided content also mentions "2026," creating ambiguity for key dates. The provided text does not specify the exact triggers for a YES or NO resolution, nor does it detail any special settlement conditions.

Available Contracts

Market options and current pricing

Outcome bucket Yes (price) No (price) Implied probability
Above $2.879 $1.00 $0.01 100%
Above $2.899 $1.00 $0.02 100%
Above $2.929 $0.89 $0.13 89%
Above $2.959 $0.16 $0.85 16%
Above $2.979 $0.03 $0.98 3%

Market Discussion

People are discussing and debating the current slight increase in US gas prices, which are trending upward nationally to around $2.89-$2.93 per gallon this week, with expectations for continued rises into spring due to seasonal refinery maintenance and the switch to summer-blend gasoline [^]. A major concern influencing the outlook is geopolitical tension, particularly potential US military action against Iran, which could significantly drive up crude oil prices and, consequently, gas prices [^]. While some prediction markets show a lower probability of the national average reaching $3.00 by late February, experts anticipate sustained increases through the 2026 driving season, citing factors like supply chain disruptions [^].

5. How is the 3:2:1 WTI Crack Spread Performing Today?

Prompt WTI Crack Spread$25.18 per barrel [^]
Recent WTI Crack Spread~$24.90 per barrel [^]
Gulf Coast Crack Spread (LLS)$10.94 per barrel (Feb 18, 2026) [^]
The 3:2:1 WTI crack spread shows a stable, bullish trend. Recent reports indicate figures around $25.00/bbl, signaling robust refinery margins [^]. This upward momentum is primarily fueled by RBOB gasoline price increases outpacing WTI crude oil costs, creating a strong incentive for refiners to maximize production [^]. However, a significant regional disparity exists, as the Gulf Coast crack spread (LLS-based) was reported at $10.94/bbl on February 18, 2026, marking a substantial 37.5% single-day decrease and contrasting sharply with the stronger NYMEX-based WTI figures [^]. While this divergence suggests localized market dynamics, the NYMEX-based spread generally holds more influence over the national outlook for gasoline prices.
Current crack spread values are elevated with high volatility. Historically, the spread has typically fluctuated between $11/bbl and $24/bbl, with the fourth quarter of 2025 averaging around $18-$19/bbl [^]. Current levels near $25/bbl significantly exceed these historical norms, reflecting high refinery margins [^]. Elevated volatility is underscored by large daily price movements, such as the LLS spread's 37.5% decline on February 18 [^]. This elevated volatility is expected to persist due to factors including mean reversion risk, refining capacity constraints, and broader macroeconomic uncertainties, which collectively exert upward pressure on retail gasoline prices.

6. How Do Refinery Outages Impact U.S. Gasoline Prices This Week?

Total Unplanned Throughput Offline~355,000 bpd (Feb 6-20, 2026)
5-Year Average Throughput Offline~245,000 bpd (2021-2025 Equivalent Period)
Deviation from Average Outage+110,000 bpd (+45%)
Unplanned refinery outages significantly impact East and Gulf Coast capacity. Both the U.S. East Coast (PADD 1) and Gulf Coast (PADD 3) refining sectors are experiencing unplanned throughput offline approximately 45% above their recent historical averages for the two weeks ending February 20, 2026. This translates to a collective loss of approximately 355,000 barrels per day (bpd) of processing capacity. PADD 3 alone accounts for about 275,000 bpd of this downtime, which is occurring concurrently with planned maintenance, such as at ExxonMobil's Baytown refinery extending into April 2026.
Outages exacerbate inventory concerns during gasoline transition. These disruptions are particularly detrimental as they coincide with the crucial transition from winter-grade to summer-grade gasoline production, interrupting the build-up of lower-RVP gasoline inventory ahead of the June 1st retail compliance deadline. This compounds a structural tightening of overall U.S. fuel supplies, with inventories predicted to reach their lowest levels since 2000 by the end of 2026. The market is highly sensitive to these disruptions, and this situation is expected to lead to higher wholesale refinery margins as market participants compete for a more limited product pool.
Supply shocks will likely increase national average gasoline prices. For the 'US gas prices this week' prediction market resolving on February 23, 2026, the immediate wholesale price shock from these outages is expected to rapidly pass through to rack and retail prices. While a significant drop in crude oil prices or a long-term reduction in motor gasoline consumption could act as minor counterbalances, the acute and substantial supply-side shock is projected to dominate, strongly suggesting an increase in the national average gasoline price.

7. What Does Commercial Trader Positioning Signal for US Gas Prices?

PMPU Net Short Position-114,194 contracts [^]
Weekly Change in Net ShortIncreased by 12,292 contracts [^]
Managed Money Net Long PositionApproximately 90,000 contracts [^]
Commercial traders recently intensified bearish hedging in RBOB Gasoline Futures. As of February 10, 2026, 'Producer/Merchant/Processor/User' (PMPU) commercial traders in RBOB Gasoline Futures held a substantial net short position of -114,194 contracts [^]. This net short position had notably increased by 12,292 contracts from the prior week. This rise was driven by a combination of reduced commercial long positions and an increase in short positions, signaling that physical market participants were actively increasing their hedges against potential price decreases, thus adopting a fundamentally bearish or defensive stance [^].
Upcoming COT report signals will indicate potential market shifts. In contrast, 'Managed Money' speculators held a significant net long position of approximately 90,000 contracts as of February 10, 2026, reflecting strong bullish sentiment from these players [^]. This divergence between hedgers and speculators often precedes periods of heightened volatility. The Commitments of Traders (COT) report released on Friday, February 20, 2026, which reflects positions as of February 17, 2026, will be crucial for the prediction market resolving on February 23, 2026.
Changes in commercial net-short positions will define market outlook. A significant reduction in the PMPU net-short commercial position in the new report (e.g., by 20,000-30,000 contracts) would signal a potential reversal in commercial sentiment. Such a change could imply an anticipated price spike, aligning with a bullish outcome for the prediction market. Conversely, if the PMPU net-short position increases further in the February 17 data, it would reinforce the existing bearish narrative. It is important to note that COT data is lagging, and positions do not account for market-moving events from February 18 through the prediction market's resolution date [^].

8. Is Transatlantic USGC to ARA Gasoline Arbitrage Currently Profitable?

U.S. Gulf Coast RBOB Spot Price$1.63 per gallon [^]
Northwest Europe (ARA) Gasoline Price$1.807 per gallon (derived from $645 USD/mt) [^]
Net Arbitrage Profit$0.027 to $0.082 per gallon [^]
A significant gasoline arbitrage profit exists between the U.S. Gulf Coast and Europe. As of mid-February 2026, an analysis of transatlantic gasoline prices reveals a theoretical profit opportunity. The U.S. Gulf Coast (USGC) RBOB spot price stood at $1.63 per gallon [^], while the Northwest Europe (ARA) Eurobob Oxy gasoline price was estimated at $1.807 per gallon, derived from $645 USD per metric ton [^]. This created a gross spread of $0.177 per gallon. After accounting for estimated logistics costs ranging from $0.095 to $0.150 per gallon, the net arbitrage profit is projected to be between $0.027 and $0.082 per gallon, confirming an open and profitable arbitrage window.
This profitable arbitrage offers substantial financial incentives for traders. The net profit potential translates to an estimated $324,000 to $984,000 per voyage for a typical MR tanker. Such profitability is expected to lead to increased U.S. gasoline exports to Europe, which would likely tighten USGC domestic supply and exert upward pressure on U.S. gasoline prices. Simultaneously, this dynamic would increase European imports, contributing to inventory builds in the ARA region. The European Union's embargo on Russian refined products further influences this trend, creating a structural reliance on imports from sources such as the United States.

9. How Will the API Gasoline Inventory Report Impact Market Resolution?

EIA Crude Inventory Draw (Week Ending Feb 13, 2026)9.0 million barrels [^]
EIA Gasoline Inventory Draw (Week Ending Feb 13, 2026)3.2 million barrels [^]
Gasoline Inventories vs. Five-Year AverageApproximately 4% above average [^]
Recent inventory data shows significant discrepancies between API and EIA reports. The week ending February 13, 2026, revealed significant draws in crude and gasoline inventories, contrasting sharply with prior builds and analyst consensus. The American Petroleum Institute (API) initially reported a modest crude draw of 609,000 barrels and a gasoline stock decrease of 312,000 barrels [^]. However, official Energy Information Administration (EIA) data subsequently confirmed much larger draws, with crude inventories falling by 9.0 million barrels and gasoline by 3.2 million barrels, leading to amplified bullish sentiment and heightened market anticipation [^].
The upcoming API report holds critical importance as a market catalyst. Due on February 22, 2026, it often sets the market narrative prior to the release of more definitive EIA data. Its significance is amplified by recent events where the API report for crude oil, despite its modest draw of 0.61 million barrels, accurately signaled a deviation from the consensus build of 1.1 million barrels, preceding the EIA's massive 9.0 million barrel draw [^]. Similarly, the API's reported gasoline draw of 0.31 million barrels foreshadowed the EIA's larger 3.2 million barrel draw [^].
Analysts project a modest gasoline inventory draw for the API report. Current analyst consensus for the upcoming API report forecasts a draw in gasoline inventories ranging from 0.5 to 1.5 million barrels. Despite these projections, historical data indicates that multi-million-barrel deviations are common, as evidenced by recent crude data showing a 10.1 million barrel divergence between EIA figures and consensus, and a 2.89 million barrel divergence between API and EIA gasoline data [^]. A deviation exceeding 2.5 million barrels from consensus for the February 22 API report would be highly significant, likely triggering strong price action in RBOB gasoline futures and dictating the outcome for short-term prediction markets.

10. What Could Change the Odds

Key Catalysts

Several bullish catalysts could drive US gas prices higher before the February 23, 2026, settlement. Escalating geopolitical tensions, particularly between the United States and Iran or disruptions in the Strait of Hormuz, along with ongoing Ukrainian drone attacks on Russian refineries, are key factors increasing crude oil prices [^]. Reports on February 19, 2026, indicated US military readiness for potential action against Iran by the end of February, adding to this geopolitical risk premium [^]. Furthermore, a substantial 9.0 million barrel drawdown in US commercial crude oil inventories for the week ending February 13, 2026, placing stocks 5% below the five-year average, suggests potential for further price increases if market anticipation of tightening supply continues [^]. Any unforeseen major refinery outages or operational issues in the US before the settlement date could also quickly restrict gasoline supply and raise prices [^].
Conversely, bearish catalysts could push prices lower. De-escalation of geopolitical tensions in the Middle East or a significant step towards resolution in the Russia-Ukraine conflict could remove the current risk premium, leading to a decline in crude and gasoline prices [^]. An unanticipated increase in global oil supply, such as from OPEC+ members or a surge in non-OPEC+ supply (e.g., from US shale or Venezuela, whose exports rose in January), before February 23 could also put downward pressure on prices [^]. Finally, any sudden negative economic reports or a significant drop in consumer demand for gasoline in the days leading to settlement could contribute to lower prices [^].

Key Dates & Catalysts

  • Strike Date: February 23, 2026
  • Expiration: March 25, 2026
  • Closes: February 23, 2026

11. Decision-Flipping Events

  • Trigger: Several bullish catalysts could drive US gas prices higher before the February 23, 2026, settlement.
  • Trigger: Escalating geopolitical tensions, particularly between the United States and Iran or disruptions in the Strait of Hormuz, along with ongoing Ukrainian drone attacks on Russian refineries, are key factors increasing crude oil prices [^] .
  • Trigger: Reports on February 19, 2026, indicated US military readiness for potential action against Iran by the end of February, adding to this geopolitical risk premium [^] .
  • Trigger: Furthermore, a substantial 9.0 million barrel drawdown in US commercial crude oil inventories for the week ending February 13, 2026, placing stocks 5% below the five-year average, suggests potential for further price increases if market anticipation of tightening supply continues [^] .

13. Historical Resolutions

Historical Resolutions: 50 markets in this series

Outcomes: 19 resolved YES, 31 resolved NO

Recent resolutions:

  • KXAAAGASW-26FEB16-2.999: NO (Feb 16, 2026)
  • KXAAAGASW-26FEB16-2.960: NO (Feb 16, 2026)
  • KXAAAGASW-26FEB16-2.932: NO (Feb 16, 2026)
  • KXAAAGASW-26FEB16-2.902: YES (Feb 16, 2026)
  • KXAAAGASW-26FEB16-2.872: YES (Feb 16, 2026)