$5 Gasoline Looms as Diesel Hits Record High

Jeff Currie, founder and CEO of Real Macro, warns that $5 gasoline is likely before the US midterms. The national diesel average has reached a record high of $6.0556, up 14% in a month and over 60% from last year. Regular gasoline sits near $4.27 according to AAA data.

Currie argues that refiners are running out of room to maneuver as plants can shift production between gasoline and diesel but this flexibility has limits. He expects the market to test these limits, with diesel potentially climbing to $7-$9 a gallon before easing.

Crude oil prices have been volatile, with Brent nearly touching $110 overnight before slipping back to around $103 by Friday morning. The International Energy Agency warned that soaring fuel costs could trigger demand destruction, putting pressure on prices which are still up over 70% this year.