Last week, we made the case it would be hard for gas prices to come in above $2.812.

We were right. Gas came in at $2.796, and if you traded the “No” contracts, you locked in roughly a 40% payout.

Not bad for trading inside a seven-tenths-of-a-cent margin.

Catch up here: [Link: Could US Gas Prices Hit Above 2.812 This Week?]

But this week the gas situation is a little different…

Now we're asking the same question again, just with a slightly higher threshold: Will gas prices come in above $2.830 by January 19th?

Let’s take a look at how things are setting up.

Yesterday the national average was $2.844

Today, as of 16 January, the national average sits at $2.839 right now.

Less than one cent of breathing room. 

We’re right about at the threshold.

So it’s going to be tough.

But let’s zoom out and look at the big picture.

Looking at the past year from FRED data, the trend is clear.

Gas prices hovering over $3.00 until November when they began their relentless slide through December and into January.

We're essentially back to price levels last seen in early 2021.

5 year chart for reference.

But will gas prices keep falling? or are we done?

Remember, since 1992, gas prices have spent roughly a third of the time below $2 per gallon.

We're not far off at $2.839. 

Only 84 cents above the $2 threshold.
Sure, it’s easy to look at the chart since 1992 and assume gas can't fall much further because 'everything's more expensive than the 90s.'

But don't let nostalgia fool you. Adjusted for inflation, we're already back to early-1990s pricing. There's absolutely no floor preventing further declines.

All that to say, the downtrend might not be over. That one penny could easily give way.

We’re right on the cusp. Which actually supports the bear case, that trading the"No" contracts on whether or not gas prices come in above $2.830 might be the right play.

But will they?

Until next week.

-Prediction Market Edge

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