Will Gas Be Above $4 on Election Day? Prices Slip, but the Cushion Holds

Gas prices will most likely still be above $4 a gallon on Election Day, according to the Kalshi "Above 4.00" outcome in the US gas prices on Election Day market. AAA's national average for regular fell to $4.3085 on Oct. 17, according to AAA. That reading was down about 2 cents from Friday and about 6 cents from a week earlier, PennLive reported. It leaves the average about 31 cents above $4.00, and it has stayed above $4 since late July.

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Gas Prices Likely to Stay Above $4 on Election Day, and the "Above 4.00" Market Moved from 88% to 94%

On Kalshi, the "Above 4.00" outcome rose from 88% to 94% over three days. That is a gain of about 6 percentage points and puts the outcome at its high for the period. Traders are treating the recent slide at the pump as too small to matter. Gulf Oil's Tom Kloza expects a "four-handle" on Election Day, meaning a price that still starts with $4. He expects prices to be lower than they are now, but not dramatically lower.

Live market odds

1 venue

US gas prices on Election Day

Each outcome's chance, from what traders are paying right now on Kalshi.

Above 4.00In this story

97%

Kalshi1.03x97¢

Above 4.25

47%

Kalshi2.00x50¢

Above 4.50

2%

Kalshi33.33x3¢

Above 4.75

2%

Kalshi50.00x2¢

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Why a Slow Decline From $4.31 Still Leaves Gas Above $4 on Nov. 3

The cushion comes down to arithmetic. At $4.3085, the average would need to fall about 31 cents in roughly two weeks to resolve this contract "No." The recent pace is about 6 cents a week. If that pace held through Nov. 3, prices would still finish well above the threshold.

The supply backdrop works against a faster drop. AAA said Oct. 15 that gas prices are not budging much as crude oil remains high, with crude near $100 a barrel and the Strait of Hormuz still disrupted by the Iran war. GasBuddy's Patrick De Haan has said that only ending the war, reopening Hormuz, or a Russia-Ukraine deal would substantially lower prices. The Political Group expects prices to stay well below the upper rungs of the ladder: on Oct. 15 it put the odds of gas above $4.50 on Election Day at just 10% to 14%, noting that prices have mostly stopped falling.

These sources establish the price level and the analyst outlook. They do not identify a single event behind the 6-point move, and we could not establish its precise cause. A similar repricing hit the $4.25 rung on Oct. 13, when its odds rose to 58% after Houthi strikes on Riyadh's airport lifted oil.

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What Could Push Gas Below $4 Before Election Day

The main path to a "No" result is a deal that ends the Iran war or reopens Hormuz. Either would sharply cut crude prices, and pump prices would follow. The remaining 6% implied probability prices that tail risk. Trump is not expected to end the war before Nov. 3, and his executive order waiving red-dye diesel restrictions is not the kind of supply shift that De Haan says would move prices.

The milestone to watch is the daily AAA national average. A steady decline of about 6 cents a week keeps the contract a strong favorite. A break toward $4.10 in late October would put the threshold in play. Live prices across every threshold are on the US gas prices on Election Day odds page. The market resolves on the AAA reading for Nov. 3.