Gas price lag 62 cents behind crude: buy the pump price catch-up
R3 (Brent above $70.99 by July 31) sits at 86¢ — already near certainty given spot at $123.75. But R2 (gas above $4.30) prices only 24¢, a 62-cent contagion gap versus crude. Historical crude-to-pump pass-through runs 3-6 weeks, and we are already seeing USO at $123.75. Buy R2 at 24¢ for a 4:1 payout on the inevitable pump price catch-up before July 31 expiry.
WTI surging to $123.75 (+3.7% today) on Strait of Hormuz fears is a regime-level supply shock that cascades into gas prices, inflation prints, and Fed optionality. Brent above $70.99 is now priced at 86¢ (R3) but gas above $4.30 sits at only 24¢ (R2) — a structural contagion lag between crude and pump prices that historically closes within 3-4 weeks. We buy the lag and sell the overextended crude contract.
CatalystWeekly EIA gasoline price report; crude-to-pump pass-through within 2-3 weeks
RiskStrategic reserve release, demand destruction, or refinery margin compression delays retail pass-through past July 31 expiry
WatchAverage US gas prices above $4.30 by July 31, 2026 (R2) resolves YES · by 2026-07-31
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