Kalshi traders see gas prices crossing $4 by end of July

• Traders see 63% odds gas prices will exceed $4.10 per gallon, but less than 5% chance of reaching $4.50 (the 2024 high of $4.56 was set on May 21)
• Oil futures have risen for three straight days, with WTI crude at $79.60 per barrel and Brent at $84.95 per barrel, both up 0.3%
• U.S. military strikes on Iran targeting capabilities used to attack commercial shipping in the Strait of Hormuz are driving energy market concerns

Summary

Key Market Development:

Kalshi prediction market traders have significantly increased their odds assessment for U.S. gas prices crossing $4 per gallon by end of July, jumping from 56% to 90% probability within just two days. Current forecasts show 93% odds of breaching $4 and 63% chance of exceeding $4.10 per gallon.

Current Market Data:

• Wednesday's national average gas price: $3.89 (up 3 cents from Tuesday)
• Last month's average exceeded $4
• 2023 peak: $4.56 on May 21
• Less than 5% probability of prices reaching $4.50+ by month-end

Geopolitical Catalyst:

The gas price speculation stems from escalating U.S.-Iran tensions following the end of a ceasefire. The U.S. Central Command launched two waves of strikes on Iran Wednesday, targeting military capabilities used against commercial shipping in the Strait of Hormuz—a critical global oil chokepoint.

Commodity Market Impact:

Oil prices have risen for three consecutive days:

• WTI crude (August delivery): $79.60/barrel, up $0.26 (0.3%)
• Brent crude (September futures): $84.95/barrel, up 0.3%

Market Implications:

The prediction market data suggests traders expect moderate gas price increases driven by geopolitical risk premiums, though not approaching year-to-date highs. The situation warrants monitoring for potential supply disruptions in the Strait of Hormuz, which could affect global oil markets and consumer fuel costs heading into peak summer driving season.

*Note: CNBC has a commercial relationship with Kalshi including customer acquisition and minority investment.*