Considering how many people I know personally that credit Trump with the low gas prices in 2020, the chance of John Q Public putting those two things together and changing their mind rounds down to 0.
but what most politicians are missing in this moment is that the price of gas is secondary to the price of Diesel,
which is rising faster than gas right now because companies do not view truckers and utilities the same as consumers.
But Diesel price is a tax added to every physical thing we buy or use.
Normally I would say this is a pedantic point, but the fact that Diesel appears to be rising at roughly 137% the rate of gasoline means that the specificity is vital here.
Heating oil is very similar (as a refinery product) to diesel - and cold weather isn't over yet in the northern hemisphere. Here in central Massachusetts, heating oil went from $3.59 March 1st to $4.39 March 6th. People will be shocked; 80 cents is a change in price previously seen only over the course of a year, not a week.
Gas at $5 and unemployment at 5%.... for 5 months...and the Trump gang...will have a lot of second thoughts...as will the voting public as a whole...PS, not to mention 50 dead Americans.
Thanks for the explanation! I think this will be exacerbated by the stock market opening, as Trump seems to be responsive to markets.
A common thread in Trump’s actions though seems to be the desire to build a legacy, whether by putting his name on things (Kennedy Center) or by settling conflicts (Gaza, Ukraine, and this, though that’s obviously more difficult than the naming).
Thus Trump wants unconditional surrender for a legacy (until and unless something else takes priority) and Israel wants a better security situation than it has had (as opposed to Iran calling for its destruction and supporting terror proxies)
This note seems more like Rachael-Maddow-level celebration of the thing that will finally kill Trump than the kind of calm analysis I expect from Silver Bulletin.
It's silly to look at Polymarket for this question. Anyone who believes retail gasoline prices are going over $5.00 by the end of March should be going long CME RBOB futures contracts at $2.77 (implying an average of about $3.47 at the pump for retail consumers, due mainly to taxes). Many billions of gallons are trading every day at these prices, Polymarket has $8,500 volume on the $5.00 contract.
Moreover futures markets also expect a rapid decline in prices, to below February 2026 levels. I suspect most drivers will forgive a temporary spike if the conflict ends successfully for the US. Moreover, end-of-March gasoline prices will be old news by the midterms.
If the war does drag on or goes badly for the US, there will of course be major negative political repercussions for Republicans. But oil prices will be only a part of that.
Do you even have EVs which can go ‘just’ 100 miles? I would have thought that there only larger models sold in the US which have normally a higher range. The small and low range cars is what we have in our European cities.
I should have written "well over". I'm not familiar with all the available ranges, so I wanted to be on the safe side.
However, there is actually a broad continuum of ranges available, particularly from older cars. We have a 2018 Chevy Volt, which is a plug-in hybrid, not a full EV. It gets 35 electric miles with the heat going in the winter, and 60 with the A.C. going in the summer. When it runs out of battery it switches to gasoline, adding 320 miles of range at about 42 mpg.
Gas prices might not have YET effected Trump's polls much...but 2-3 months of gas at $4.90 certainly will....His negativities are really just sinking in.....Give it a few more months and some dead GIs...and let's see then what his polls produce.
Why use Polymarket to impute the course of gas prices instead of natural gas or WTI futures? Those are much larger and more liquid markets and they seem to be a lot less bearish. I don't disagree with the thrust of the argument, and there's definitely a time and a place for prediction markets, but this doesn't seem like the best use of them.
The relationship between WTI futures and gas prices at the pump isn't directly proportional for a whole bunch of reasons. If there were gasoline futures, that would be more helpful, but we make do with what we have.
I don't know much about energy markets - never worked in the space. Can you expound on what those reasons for the imperfect correlation are? Are they, like, transportation and refining costs? Presumably that part of the cost structure wouldn't change that much because of a supply shock?
The biggest things relate to how gas stations set their prices (they tend to go up quickly and then go down slowly, and they can overcompensate when they think that consumers are expecting prices to rise). There are other factors as well like refinery capacity, cost of ethanol, and changes in blends, but they shouldn’t be too relevant for this case. They are relevant though for coming up with a “oil future price to gasoline” conversion factor, and for an article like this about politics, the actual price of the gasoline is meaningful.
But aren't those going to vary so much region to region and station to station that it's not meaningful? Again, I don't know! I'm not an expert. But I'm biased to think WTI or Brent futures are a more meaningful statistic since that's what I tend see FT and Bloomberg and The Economist cite when they're evaluating this. Frankly, it's so unusual to use Polymarket to look at this that it makes me suspicious.
Average national gas station prices are a totally normal thing for news sources to cite - CNN has it featured prominently on its home page right now. It's a lot more meaningful for consumers than the price of a barrel of oil, which is double abstracted (how many gallons is a barrel? how much will it cost me if oil goes up by $10/barrel?). Obviously gas station price averages will vary by region, but they're at least a much closer proxy.
Now, the hard part is reporting on what the price will be in the future. WTI and Brent futures are easy to cite, so journalists do cite them. But there's not a good future to report on for national gas station prices. It's not a thing that you can normally trade on for Wall Street. Polymarket (and other prediction markets) fill in that gap.
Of course, prediction markets are also used for gambling, but people also gamble on the stock market (just look at Robinhood's popularity) and that doesn't make it useless.
What if Hormuz gets unblocked before the month is out, no more refineries or other oil infrastructure is taken offline (a BIG if, admittedly), and/or Iran's oil floods the market in an effort to fund the rebuilding of the country?
This could very easily go the other way, and fast.
And don't forget that US oil production has adapted to OPEC shenanigans, being able to quickly ramp up and ramp down based on the global oil market. The US oil industry WILL impose a thermostatic reaction on the oil market.
The running joke is that Texas Tech is going to be going into the 2026 football season awash in NIL money.
I'm 0-3 voting for Trump, but this seems like a one-sided celebration of his current peril.
Turns out when we elect an 80 year old with advancing dementia as President who isn’t able to meet the moment with advance planning or offering a clear coherent explanation of what we are doing and why, things don’t go well. We are kind of getting what we deserved.
I think it depends on how soon the shock is over. People forget events so fast. It may be that by October we'll only remember that Iran is no longer getting crowds together to yell "Death to America!" which would be much for the better, in my opinion. And that we've destroyed the nukes they meant to use to effect Death to America. However, I notice this morning's news says Israel is hitting the Iranian big storage tanks. Which are all full, as are the entire Gulf's storage tanks, because so far no one can move the oil anymore. Could be trouble ----
But if oil can move again, say by April, gas and heating oil and diesel would come down.
Good luck with that strategy … the Trump administration is obviously winging it and didn’t do any scenario or contingency planning. They aren’t sending their best.
Well, the US actually planned about 6 months to strike Venezuela, which was why everything went down so well. By looking at how they deployed carrier groups and how first couple days unfolded, it is hard to say the same. My money is on Bibi has some pretty condemning materials on DJT and he got dragged into this conflict unwillingly and unprepared.
Bad timing for the RV snowbird crowd, many of whom will be making the 1000-mile-plus trek home from Florida, Texas and Arizona in the coming weeks. Few will get more than 10 mph. Cha-Ching.
It also doesn’t help the Trump thinks fossil fuels are the future, yet simultaneously he’s demonstrating how sensitive oil is to geopolitical shocks.
Considering how many people I know personally that credit Trump with the low gas prices in 2020, the chance of John Q Public putting those two things together and changing their mind rounds down to 0.
Gas prices are going to get bad,
but what most politicians are missing in this moment is that the price of gas is secondary to the price of Diesel,
which is rising faster than gas right now because companies do not view truckers and utilities the same as consumers.
But Diesel price is a tax added to every physical thing we buy or use.
Normally I would say this is a pedantic point, but the fact that Diesel appears to be rising at roughly 137% the rate of gasoline means that the specificity is vital here.
Heating oil is very similar (as a refinery product) to diesel - and cold weather isn't over yet in the northern hemisphere. Here in central Massachusetts, heating oil went from $3.59 March 1st to $4.39 March 6th. People will be shocked; 80 cents is a change in price previously seen only over the course of a year, not a week.
Gas at $5 and unemployment at 5%.... for 5 months...and the Trump gang...will have a lot of second thoughts...as will the voting public as a whole...PS, not to mention 50 dead Americans.
Thanks for the explanation! I think this will be exacerbated by the stock market opening, as Trump seems to be responsive to markets.
A common thread in Trump’s actions though seems to be the desire to build a legacy, whether by putting his name on things (Kennedy Center) or by settling conflicts (Gaza, Ukraine, and this, though that’s obviously more difficult than the naming).
Thus Trump wants unconditional surrender for a legacy (until and unless something else takes priority) and Israel wants a better security situation than it has had (as opposed to Iran calling for its destruction and supporting terror proxies)
This note seems more like Rachael-Maddow-level celebration of the thing that will finally kill Trump than the kind of calm analysis I expect from Silver Bulletin.
It's silly to look at Polymarket for this question. Anyone who believes retail gasoline prices are going over $5.00 by the end of March should be going long CME RBOB futures contracts at $2.77 (implying an average of about $3.47 at the pump for retail consumers, due mainly to taxes). Many billions of gallons are trading every day at these prices, Polymarket has $8,500 volume on the $5.00 contract.
Moreover futures markets also expect a rapid decline in prices, to below February 2026 levels. I suspect most drivers will forgive a temporary spike if the conflict ends successfully for the US. Moreover, end-of-March gasoline prices will be old news by the midterms.
If the war does drag on or goes badly for the US, there will of course be major negative political repercussions for Republicans. But oil prices will be only a part of that.
They're up 60-70 cents already here in central OH. My cheeks are clenched waiting for what this week brings because I commute 80 miles a day.
@Sunder - Go lease an EV while there are still some left. They can all do over 100 miles on a charge.
Do you even have EVs which can go ‘just’ 100 miles? I would have thought that there only larger models sold in the US which have normally a higher range. The small and low range cars is what we have in our European cities.
I should have written "well over". I'm not familiar with all the available ranges, so I wanted to be on the safe side.
However, there is actually a broad continuum of ranges available, particularly from older cars. We have a 2018 Chevy Volt, which is a plug-in hybrid, not a full EV. It gets 35 electric miles with the heat going in the winter, and 60 with the A.C. going in the summer. When it runs out of battery it switches to gasoline, adding 320 miles of range at about 42 mpg.
Gas prices might not have YET effected Trump's polls much...but 2-3 months of gas at $4.90 certainly will....His negativities are really just sinking in.....Give it a few more months and some dead GIs...and let's see then what his polls produce.
Why use Polymarket to impute the course of gas prices instead of natural gas or WTI futures? Those are much larger and more liquid markets and they seem to be a lot less bearish. I don't disagree with the thrust of the argument, and there's definitely a time and a place for prediction markets, but this doesn't seem like the best use of them.
The relationship between WTI futures and gas prices at the pump isn't directly proportional for a whole bunch of reasons. If there were gasoline futures, that would be more helpful, but we make do with what we have.
I don't know much about energy markets - never worked in the space. Can you expound on what those reasons for the imperfect correlation are? Are they, like, transportation and refining costs? Presumably that part of the cost structure wouldn't change that much because of a supply shock?
Nate’s not an advisor to the CME
The biggest things relate to how gas stations set their prices (they tend to go up quickly and then go down slowly, and they can overcompensate when they think that consumers are expecting prices to rise). There are other factors as well like refinery capacity, cost of ethanol, and changes in blends, but they shouldn’t be too relevant for this case. They are relevant though for coming up with a “oil future price to gasoline” conversion factor, and for an article like this about politics, the actual price of the gasoline is meaningful.
But aren't those going to vary so much region to region and station to station that it's not meaningful? Again, I don't know! I'm not an expert. But I'm biased to think WTI or Brent futures are a more meaningful statistic since that's what I tend see FT and Bloomberg and The Economist cite when they're evaluating this. Frankly, it's so unusual to use Polymarket to look at this that it makes me suspicious.
Average national gas station prices are a totally normal thing for news sources to cite - CNN has it featured prominently on its home page right now. It's a lot more meaningful for consumers than the price of a barrel of oil, which is double abstracted (how many gallons is a barrel? how much will it cost me if oil goes up by $10/barrel?). Obviously gas station price averages will vary by region, but they're at least a much closer proxy.
Now, the hard part is reporting on what the price will be in the future. WTI and Brent futures are easy to cite, so journalists do cite them. But there's not a good future to report on for national gas station prices. It's not a thing that you can normally trade on for Wall Street. Polymarket (and other prediction markets) fill in that gap.
Of course, prediction markets are also used for gambling, but people also gamble on the stock market (just look at Robinhood's popularity) and that doesn't make it useless.
Currently $5.50 here in SoCal. Time for y’all to get an EV.
And as we head into planting season, Iran happens to be one of the world's biggest producers of fertilizer
“inflation was a substantial factor in his defeat of Biden.” Biden?
Obviously an error but in practice Harris basically (foolishly) ran as a second Biden term.
sure, I understood it was an error and what the general sentiment was. I was just highlighting the typo for correction.
Trump definitively defeated Biden. Once you drop out of the race, you lost.
This article seems like a bit of wishcasting.
What if Hormuz gets unblocked before the month is out, no more refineries or other oil infrastructure is taken offline (a BIG if, admittedly), and/or Iran's oil floods the market in an effort to fund the rebuilding of the country?
This could very easily go the other way, and fast.
And don't forget that US oil production has adapted to OPEC shenanigans, being able to quickly ramp up and ramp down based on the global oil market. The US oil industry WILL impose a thermostatic reaction on the oil market.
The running joke is that Texas Tech is going to be going into the 2026 football season awash in NIL money.
I'm 0-3 voting for Trump, but this seems like a one-sided celebration of his current peril.
Turns out when we elect an 80 year old with advancing dementia as President who isn’t able to meet the moment with advance planning or offering a clear coherent explanation of what we are doing and why, things don’t go well. We are kind of getting what we deserved.
"Voters get the government they deserve" is pretty much the story of the past decade.
Countered I guess by, "Democracy is the worst form of government, except for all the others that have been tried."
Governing is hard. It makes me more appreciative of the times I have a good one, especially at the local level.
I think it depends on how soon the shock is over. People forget events so fast. It may be that by October we'll only remember that Iran is no longer getting crowds together to yell "Death to America!" which would be much for the better, in my opinion. And that we've destroyed the nukes they meant to use to effect Death to America. However, I notice this morning's news says Israel is hitting the Iranian big storage tanks. Which are all full, as are the entire Gulf's storage tanks, because so far no one can move the oil anymore. Could be trouble ----
But if oil can move again, say by April, gas and heating oil and diesel would come down.
Good luck with that strategy … the Trump administration is obviously winging it and didn’t do any scenario or contingency planning. They aren’t sending their best.
Well, the US actually planned about 6 months to strike Venezuela, which was why everything went down so well. By looking at how they deployed carrier groups and how first couple days unfolded, it is hard to say the same. My money is on Bibi has some pretty condemning materials on DJT and he got dragged into this conflict unwillingly and unprepared.
Bad timing for the RV snowbird crowd, many of whom will be making the 1000-mile-plus trek home from Florida, Texas and Arizona in the coming weeks. Few will get more than 10 mph. Cha-Ching.
Welp, oil has just about hit $110 a barrel. I didn't expect $19 increase in a couple hours.