$5 Gas and $7 Diesel: Commodities Strategist Warns of Energy Crisis

Commodities strategist Jeff Currie warns that average US gasoline prices will almost certainly hit $5 a gallon before the midterm elections, citing a toxic combination of scarcity and currency debasement. The shortages began in refined products but are now spreading upstream into crude oil.

The recent flare-up in the US-Iran war pushed the average price to over $4.29 a gallon as of Thursday, with diesel topping $6 a gallon for the first time. Currie puts the probability of $5 gas by Election Day at 'extremely high', warning that refineries cycling between diesel and gasoline output will eventually exhaust their operational flexibility.

He also forecasts US diesel could reach $7 to $9 a gallon, stating that the price moves on Thursday signaled markets are bracing for larger and more sustained disruptions. Currie said the entire forward curve moved, not just the front end, indicating something more structural than a typical supply squeeze is underway.