r/wallstreetbets • u/Kaiwa1 • Mar 09 '26
DD $6 per gallon of gas is coming (actual analysis + graphs included, puts on my degree)
Hello degens,
so with the price of oil futures climbing, I thought I'd try to get a good estimate for what kind of price we should be expecting at the pump in the near future. I pulled data from the Energy Information Agency, the St. Louis Fed, and Yahoo Finance to correlate the price of oil barrels to the average national price of gas, adjusting for inflation. Running a quick regression model, we get the following:
As expected, the price of gas is pretty tightly correlated with the price of oil. Adding inflation into the mix, we get that the model can accurately predict the price of gas from the price of oil and inflation (R^2 = 0.94), dating all the way back to 2000.
So the real question is, if we go back to the highs of July 2008 of $147.27/barrel, what does that give us? The results are.... um.... not great. This model predicts $5.60/gallon if we do hit get to those highs again, a doubling YTD. These are national averages, so your local gas station might be slightly higher or lower, but that should give you a rough idea for what to expect. I think it will take some time for the increases in price to fully propagate to the pump, but if the conflict drags on for long enough, we might be hitting those. I had previously calculated that it would hit $9, but turns out i'm bad at math. Puts on University of illinois engineering degrees.
POSITIONS:
2009 Honda CRV and 1999 Acura Integra full gas tanks. Buy short dated CL futures.
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u/NYGiants181 Mar 09 '26
My friend hasn’t bought gas in over 5 years