How low will gas prices in New York get this year?
Short Answer
The model assigns meaningfully higher odds than the market for New York gas prices falling below $2.90 in 2026, with the model at 19.3% versus the market at 9.0%. This divergence is influenced by forecasts of declining crude oil and retail gasoline prices throughout 2026.
1. Executive Verdict
- The U.S. Energy Information Administration forecasts lower retail gasoline prices in 2026.
- Gas prices below $2.90 in New York appear unlikely by year-end 2026.
- Summer 2026 is expected to see a significant surge in U.S. gasoline demand.
- U.S. refinery utilization may decrease in late 2026, potentially affecting supply.
- New York gas prices typically decline moderately during the fourth quarter.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Below $2.90 | 9.0% | 19.3% | The EIA forecasts lower average gas prices, but prediction markets reflect skepticism for levels below $2.90. |
| Below $2.80 | 8.0% | 16.1% | The EIA forecasts lower average gas prices, but prediction markets reflect skepticism for levels below $2.80. |
| Below $2.70 | 9.0% | 12.8% | The EIA forecasts lower average gas prices, but prediction markets reflect skepticism for levels below $2.70. |
| Below $2.50 | 7.0% | 6.4% | The EIA forecasts lower average gas prices, yet prediction markets suggest these extreme lows are unlikely. |
| Below $2.60 | 22.0% | 9.6% | The EIA forecasts lower average gas prices, yet prediction markets suggest these extreme lows are unlikely. |
Current Context
Gas prices in New York are currently elevated with an uncertain future. As of mid-May 2026, the average retail gasoline price in New York stands at approximately $4.65 per gallon [^][^]. This price reflects an upward trend, primarily attributed to ongoing geopolitical tensions in the Middle East and tightening domestic oil supplies [^][^]. Prediction markets, including those on platforms like Robinhood, indicate substantial uncertainty regarding year-end 2026 gas prices, with a nearly 50% implied probability that prices in New York will remain above $4.80 per gallon by December 31, 2026 [^].
Geopolitical events and supply issues continue driving price volatility. The current volatility in 2026 gas prices is largely driven by the ongoing conflict involving Iran, disruptions to shipping through the Strait of Hormuz, and existing constraints in U.S. refining capacity [^][^][^][^]. These factors collectively suggest it is unlikely for prices to reach "low" historical levels this year [^][^][^][^]. However, the U.S. Energy Information Administration (EIA) forecasts a potential decline in crude oil prices from their current elevated levels later in 2026 [^]. This anticipated decrease is contingent on the eventual recovery of oil production in the Middle East and the normalization of shipping traffic through the Strait of Hormuz, which could subsequently ease some pressure on retail gasoline prices towards the end of the year [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This market, which asks if New York gas prices will fall below $2.90 this year, has seen a general downward trend in perceived probability. The price opened at 15.0% and has since declined to its current level of 9.0%, trading within a range of 6.0% to 16.0%. The most significant price movement was a sharp 9.0 percentage point spike on May 08, when the price jumped from 6.0% to 15.0%. However, the provided context indicates there was no identifiable news event or social media activity that appeared to drive this specific increase, suggesting it may have been caused by a single large trade or other idiosyncratic market factor rather than a shift in broader fundamentals. Following this peak, the price has steadily decreased, indicating the spike was short-lived.
The total trading volume of 350 contracts is relatively low, and recent data points show zero volume, suggesting limited market participation and potentially low conviction among traders. The price action has established a resistance level around 16.0% and a support level at 6.0%. The market's inability to sustain the high of 15.0% reached on May 08 and its subsequent decline points to weak buying pressure at higher probability levels. Overall, the chart indicates a pessimistic market sentiment. The downward trend from a 15.0% starting price to the current 9.0% reflects a growing belief that gas prices are unlikely to drop below the $2.90 threshold by the end of the year, a sentiment that aligns with reports of currently elevated prices and ongoing supply concerns.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
📈 May 08, 2026: 9.0pp spike
Price increased from 6.0% to 15.0%
Outcome: Below $2.90
What happened: Based on the provided research, there is no identifiable social media activity or traditional news event that served as a primary driver for the 9.0 percentage point spike on May 08, 2026, in the market for New York gas prices falling "Below $2.90" by year-end. While the U.S. Energy Information Administration (EIA) projected national average gasoline prices to be below $2.90 in 2026, this was a general outlook and not a specific announcement tied to the May 8th movement [^][^][^][^]. In fact, early May 2026 saw New York gas prices rising, attributed to Middle East tensions and seasonal fuel changes, which would typically cause prices to increase rather than fall [^][^]. Therefore, social media was irrelevant, as no related activity was found.
4. Market Data
Contract Snapshot
This market resolves to "Yes" if the average regular gas price for New York is strictly lower than $2.60 by December 31, 2026, as reported by AAA; otherwise, it resolves to "No." The market opened on January 6, 2026, and the outcome will be determined by December 31, 2026. If the "Yes" event occurs, the market will close at 10:15 am, 11 am, or 3 pm ET on the following business day, with payouts projected one hour after closing.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Below $2.60 | $0.20 | $0.90 | 22% |
| Below $2.70 | $0.09 | $0.97 | 9% |
| Below $2.90 | $0.10 | $0.91 | 9% |
| Below $2.80 | $0.09 | $0.92 | 8% |
| Below $2.50 | $0.07 | $0.99 | 7% |
Market Discussion
New York regular gasoline was about $4.52/gal on 05/18/2026, significantly above its early March 2026 low of about $2.905/gal, indicating the lowest point for the year may have already occurred [^]. While national forecasts suggest U.S. retail gasoline prices could average below $3/gal for 2026 or by December [^], these estimates may not directly translate to New York, where prices were about $4.65/gal on 05/12/2026 [^]. Expert commentary further indicates gasoline prices may remain above $3 for all of 2026, implying any floor for New York could be higher than sub-$3 national projections [^].
5. Based on forecasts from AAA and the EIA, how is the 2026 summer driving season expected to impact U.S. gasoline demand and inventories?
| Memorial Day drivers | 39.1 million Americans (2026) [^] |
|---|---|
| Gasoline stock drop | 4.1 million barrels in one week (early May 2026) [^][^] |
| Projected August inventory | ~198 million barrels (end of August 2026) [^] |
The 2026 summer driving season anticipates a significant surge in U.S. gasoline demand. A record 39.1 million Americans are projected to drive for Memorial Day [^], with overall U.S. petroleum demand in mid-May 2026 remaining steady or slightly above the previous year's levels despite increased prices [^]. Gasoline demand is expected to continue its upward trend from late May through July as vacation and road travel intensify across the country [^]. This robust consumer activity is a primary driver behind the rising fuel prices [^][^][^].
Conversely, U.S. gasoline inventories are forecasted to be notably lower throughout 2026. This reduction is attributed to decreased refinery production and tight market conditions, particularly within the Atlantic Basin [^]. In early May 2026, U.S. gasoline stocks experienced a larger-than-expected draw, decreasing by 4.1 million barrels to reach 215.7 million barrels in just one week [^][^]. By late April 2026, stocks had fallen to their lowest point since December, more than 2 million barrels below the five-year seasonal average [^]. Analysts further project inventories could decline to approximately 198 million barrels by the close of August 2026, highlighting ongoing pressure on the supply side [^][^].
6. How does the EIA's year-end 2026 forecast for crude oil prices compare to projections from OPEC and major investment banks?
| EIA Q4 2026 Crude Oil Forecast | $89/bbl [^] |
|---|---|
| Investment Banks' 2026 Brent Forecast Range | $85/bbl to $100/bbl (April-May 2026 [^]) |
| Brent Crude Price in Prolonged Hormuz Disruption | $130-$150/bbl [^][^] |
The U.S. Energy Information Administration (EIA) and investment banks project varying crude oil prices for 2026. The EIA projects crude oil prices to average $89/bbl in the fourth quarter of 2026 [^]. In contrast, major investment banks generally forecast Brent crude prices ranging from $85/bbl to $100/bbl for year-end or the full year 2026, with some quarterly targets reaching as high as $110/bbl [^]. The provided information does not include an explicit year-end 2026 crude oil price forecast from OPEC.
Recent investment bank forecasts show upward revisions for 2026. In May 2026, Goldman Sachs raised its 2026 average price forecast for Brent crude to $85/bbl [^]. Barclays increased its full-year 2026 Brent crude forecast to $100/bbl, and HSBC raised its annual Brent average forecast for 2026 to $95/bbl [^]. Morgan Stanley, also in May 2026, maintained Brent crude forecasts of $110/bbl for Q2 2026 and $100/bbl for Q3 2026, considering $90/bbl a "best-case scenario" for oil prices in 2026 [^][^][^]. Similarly, Bank of America stated in May 2026 that an average Brent crude oil price of $90/bbl for the remainder of the year is a "best-case scenario" [^][^]. J.P. Morgan, which had earlier expected Brent crude to average around $60/bbl in February 2026 [^], later revised its base view to an average of $96/bbl for 2026, with the fourth quarter averaging $98/bbl, under a scenario where the Strait of Hormuz reopens by June 1 [^].
Geopolitical tensions are significantly influencing crude oil price projections. These investment bank projections reflect the structural impact of supply losses linked to the Strait of Hormuz [^]. Many forecasts were revised upward due to the ongoing conflict in Iran, which is impacting trade flows and has led to the effective closure of the Strait of Hormuz [^][^][^]. Should the disruption in the Strait of Hormuz be prolonged or escalate, prices are envisioned to surge to $130-$150/bbl [^][^].
7. What is the current and projected U.S. refinery utilization rate for the second half of 2026, and how might that affect domestic gasoline supply?
| Early 2026 Refinery Utilization Rate | Approximately 90% [^] |
|---|---|
| End 2026 Petroleum Inventories | Lowest levels since 2000 [^][^] |
| 2026 Retail Gasoline Prices | Lower on average than 2025 [^] |
U.S. refinery utilization rates are expected to decrease in late 2026. After remaining near multi-year seasonal highs of approximately 90% in early 2026, utilization rates are projected to ease modestly in the second half of 2026 [^]. This anticipated decline is primarily attributed to planned maintenance cycles and announced refinery closures [^][^].
Petroleum inventories are projected to reach multi-decade lows by late 2026. As a result of these closures and rising consumption, U.S. petroleum inventories for gasoline, distillate, and jet fuel are projected to fall to their lowest levels since 2000 by the end of 2026 [^][^]. These tightening inventories might affect domestic gasoline supply [^].
Despite reduced output, gasoline prices are forecast to decline in 2026. The U.S. Energy Information Administration (EIA) forecasts that U.S. retail gasoline prices will be lower on average in 2026 compared to 2025 [^]. This prediction is largely driven by anticipated declines in global crude oil prices, which are expected to outweigh the impacts of reduced domestic refining output [^]. Prediction markets for year-end 2026 gasoline prices in New York are active, reflecting market uncertainty regarding regional supply constraints versus national trends [^].
8. What historical data from sources like the EIA and NYSERDA reveals about the typical seasonal price drops for gasoline in New York during the fourth quarter?
| Q4 Seasonal Trend | Moderate decline from September/October peaks towards year-end [^] |
|---|---|
| Q4 Monthly Averages (2021-2025) | Transition from higher October/November prices to lower or stable December levels [^][^] |
| 2026 Price Outlook | Abnormal geopolitical events may override typical seasonal price drops [^] |
New York gasoline prices generally exhibit a seasonal pattern in the fourth quarter, typically declining moderately from September or October peaks as the year concludes [^] . This predictable trend, however, is frequently disrupted by broader market volatility, which can prevent a consistent price drop in every instance [^].
Historical data from 2021 to 2025 for New York State illustrates this pattern, with monthly averages during the fourth quarter often shifting from slightly higher prices in October and November to more stable or lower levels in December [^] [^] . These historical trends, however, are subject to exceptions, primarily influenced by various macroeconomic factors impacting energy markets [^][^].
Future price reductions may be overridden by geopolitical events. Looking ahead to 2026, current energy market analyses and prediction markets indicate that typical seasonal price reductions could be superseded by abnormal geopolitical events [^]. Potential disruptions, such as supply chain issues or shifts in Middle Eastern exports, have been identified as factors that might override the usual seasonal price drops in the coming year [^].
9. What specific geopolitical de-escalation events involving Iran and the Strait of Hormuz could trigger a significant drop in New York gas prices before the end of 2026?
| US gasoline prices (mid-March 2026) | Exceeded $5 per gallon in some regions [^][^][^] |
|---|---|
| Market stabilization time | 1-3 months (after transit restoration) [^][^] |
| Probability of NY gas below $2.60-$2.90 (end of 2026) | 6-17% (prediction markets) [^][^][^][^][^] |
Specific geopolitical de-escalation events are crucial for a significant drop in New York gas prices before the end of 2026. These include achieving a credible and lasting ceasefire, the official reversal of Iran's declared "closed" status on the Strait of Hormuz, and the full restoration of secure, unhindered commercial shipping transit through the waterway [^][^].
The ongoing Strait of Hormuz crisis significantly increased US gas prices. This crisis began with Iran's closure of the waterway on March 4, 2026, leading to a substantial rise in global oil prices [^][^][^]. By mid-March 2026, this situation caused US gasoline prices to surpass $5 per gallon in some regions [^][^][^]. Experts estimate that once secure, unhindered commercial shipping resumes, it would take approximately 1-3 months for market pricing to fully stabilize [^][^].
Prediction markets show low confidence in falling gas prices. Currently, prediction platforms such as Kalshi and Robinhood indicate low probabilities, ranging from 6% to 17% depending on the specific threshold, for New York gas prices dropping below $2.60-$2.90 per gallon by the end of 2026 [^][^][^][^][^]. This reflects skepticism regarding a quick or substantial recovery in gas prices given the ongoing conflict [^][^][^][^][^].
10. What Could Change the Odds
Key Catalysts
Market forecasts for the remainder of 2026 depend heavily on the duration of the Strait of Hormuz closure and the speed of production recovery [^] [^] [^] . Energy Information Administration (EIA)">[^]. EIA and other analysts expect crude oil prices to decline as transit routes reopen and production in the Middle East normalizes [^][^][^].
Key Dates & Catalysts
- Strike Date: December 31, 2026
- Expiration: January 07, 2027
- Closes: December 31, 2026
11. Decision-Flipping Events
- Trigger: The primary bearish catalyst in early 2026 was the initial expectation of global oil oversupply [^] [^] [^] .
- Trigger: This was, however, overwhelmed by the bullish impact of the U.S.-Iran conflict, which led to the closure of the Strait of Hormuz and significant production shut-ins [^] [^] [^] .
- Trigger: Market forecasts for the remainder of 2026 depend heavily on the duration of the Strait of Hormuz closure and the speed of production recovery [^] [^] [^] .
- Trigger: EIA and other analysts expect crude oil prices to decline as transit routes reopen and production in the Middle East normalizes [^] [^] [^] .
13. Historical Resolutions
No historical resolution data available for this series.
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