Gasoline Prices, Oil Markets, and Future Price Projections

Short Term Memories Lost on People
Annual Gas Prices Per President
Bush Through Trump 2

1. Joe Biden – $3.60
2. Trump (Current Term) $3.24
3. Barack Obama (First Term) $3.12
4. Barack Obama (Second Term) $2.95
5. George W Busch (Second Term) $2.77
6. Donald Trump (First Term) $2.57
7. George W Bush (First Term) $1.59

In Oil – prices change fast – the below starting with Brent Futures was written before July 6, 2026

Short-term oil futures are trading considerably below where they were. July 6, 2026 – WTI closed at $68.60/barrel and Brent closed at 71.04/barrel. The below just explains what is going on in the oil markets and how fast projections of future pricing can change.

Brent Futures

The crude oil futures market is currently experiencing extreme backwardation-a state where near-term spot contracts are trading at a significant premium relative to contracts dated further out. This pricing curve stems directly from recent geopolitical events in the Middle East (specifically the conflict involving the U.S., Israel, and Iran that escalated earlier this year). While the temporary 60-day ceasefire extension has cooled near-term spikes slightly, the market structure indicates that traders view the intense supply crunch and the effective closure of the Strait of Hormuz as a short-term disruption rather than a permanent state.

The current pricing breakdown for oil futures 6 to 12 months out reveals the following expectations:

1. WTI Crude Oil Futures Curve
   • Near-Term (July 2026): Trading around $87.36 to $87.90 per barrel.
   • 6 Months Out (December 2026): Trading significantly lower at $78.90 per barrel.
   • 12 Months Out (May/June 2027): The steep downward slope continues, pricing a return to the mid-to-high $70s.
2. Brent Crude Oil Futures Curve
   • Near-Term (July 2026): Sits around $91.12 to $92.05 per barrel.
   • 6-12 Months Out: The back end of the Brent curve drops toward the low $80s and high $70s.

Analysts (including the U.S. Energy. Information Administration) project Brent will drop to an average of $89/bbl in Q4 2026 and plunge further to an average of $79/bbl across 2027 as Middle Eastern production and shipping channels fully stabilize.

Key Takeaways for Market Participants

• Positive Roll Yield: Because the curve is so steeply backward dated, investors holding long positions who roll their contracts forward have been capturing a substantial “roll yield.” For instance, CME Group data noted that rolling from front-month contracts earlier this spring generated a solid hidden premium above the simple spot price increase.
• The Risk Factor: Going long on the back end of the curve (6-12 months out) relies entirely on geopolitical tensions remaining sticky. If the temporary ceasefires solidify into permanent diplomatic resolutions and supply infrastructure recovers faster than expected, spot prices will rapidly collapse toward the lower back-end futures.

1. WTI vs. Brent: The Regional Proxy Distinction
   • While WTI is the proxy for the North American market, Brent Crude is the proxy for the global oil market. The relationship between the two (known as the WTI-Brent spread) reflects the balance between domestic U.S. supply dynamics and international geopolitical factors.
2. U.S. Energy Sector Health
   • When analysts, economists, and media outlets discuss U.S. oil prices, they are almost always referring to WTI. It is used as a proxy for:
     • The profitability of North American exploration and production (E&P) companies.
     • Capital expenditures and drilling activity in major U.S. shale basins (like the Permian Basin).
3. Domestic Macroeconomic Pressures
   • WTI is heavily relied upon by the Federal Reserve and economists as a leading proxy for consumer inflation expectations in the United States.
     • Because WTI closely tracks domestic fuel costs and retail prices.