Current Market Outlook

Prediction markets currently assign a 76% probability that the average regular gas price in New York will be below $2.90 per gallon by December 31, 2026, according to AAA data. This price, trading on Kalshi, indicates a strong consensus that fuel costs will remain relatively low through the end of 2026. A 76% chance suggests the market views sub-$2.90 gas as the clear base case, though not a complete certainty. With only about $2,000 in trading volume spread across five related markets, liquidity is thin, meaning this price may be more sensitive to new information.

Key Factors Driving the Odds

Two primary macroeconomic factors are likely shaping this pessimistic outlook for gas prices. First, the U.S. Energy Information Administration (EIA) projects continued growth in domestic crude oil production, which should help keep a lid on global benchmark prices. Second, the accelerated adoption of electric vehicles and sustained improvements in vehicle fuel efficiency are applying structural downward pressure on long-term gasoline demand. For New York specifically, state policies aimed at reducing transportation emissions could further dampen consumption growth relative to the national average, supporting lower regional prices.

What Could Change These Odds

The current market pricing faces significant upside risks that could see the probability of sub-$2.90 gas fall. A major geopolitical disruption in a key oil-producing region could trigger a sustained price spike. Domestically, more aggressive federal or state climate policies, such as new restrictions on drilling or refining, could constrain supply and lift prices. Conversely, a deeper-than-expected global economic slowdown in 2025 or 2026 would reduce demand and could solidify the path to lower prices. Traders should monitor monthly EIA Short-Term Energy Outlook reports and OPEC+ production decisions for signals that could shift these odds.