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Prediction Market Edge
April 3, 2026
We’re already feeling it at the pump.
Now there's a market on it. Kalshi is forecasting the national average gas price at $4.10 this week. $4.10!
The specific contract: will AAA's national average exceed $4.140 on April 6th?
As of this morning, AAA has the national average at $4.091. The contract needs roughly 5 cent move in three days.
Good thing it’s a holiday weekend?
That chart tells the whole story in one image.
Most recent Federal Reserve Economic Data, (FRED), shows gas prices surging the past three months…
Gas was sitting at $2.77 in January.
By March 30th it hit $3.99. PARABOLIC.
The classic, macroeconomics textbooks definition of "supply shock."
More recent data, the AAA map shows more…
California, Hawaii, DC, Maryland, Connecticut, already above $4.50 in some areas. The Midwest and South are holding lower but the national average is being dragged up by the coasts.
The $4.091 national average masks a wide range of pain depending on where you live.
Catch up
If you have been living under a rock lately, you might not be aware the Strait of Hormuz is effectively closed.
Bloomberg's reporting this week put the numbers in stark terms: the closure is reducing global oil flows by roughly 11 million barrels per day after accounting for emergency interventions.
Saudi Arabia has diverted 60% of its oil exports through its East-West pipeline to bypass the Strait.
The IEA has released emergency stockpiles.
The US has issued waivers on Russian and Iranian oil sanctions. All of these are finite buffers being depleted in real time.
I could go on but this morning, we’re getting to the point where the president is saying things like this:
"With a little more time, we can easily OPEN THE HORMUZ STRAIT, TAKE THE OIL, & MAKE A FORTUNE. IT WOULD BE A 'GUSHER' FOR THE WORLD."
The comment section is divided.
One trader noted AAA typically lags GasBuddy by a day or two — GasBuddy is already showing the national average closer to $4.079-$4.091, suggesting AAA's next update could confirm… Another pointed out that Trump's messaging today could create downward pressure if markets read it as a de-escalation signal.
Who knows, I mean, $4.14 by Sunday is cutting it close, yet, we’re entering a holiday weekend, so one might expect travel to increase. (Doesn’t guarantee prices will go up but it’s not uncommon to see stations increase prices to milk the extra travel).
The underlying supply shock is real though. We’re on the cusp of even more geopolitical, supply, and energy disruption where the second and third order effects we have yet to see.
But is it enough to push prices over $4.14 this Sunday?
We’ll see.
Happy Friday.
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