The bearish case for Unleaded Gas
Key points:
- If ever there was a time when geopolitical events could send the price of Unleaded Gas sharply higher, it is now
- Given the apparent state of fundamentals and price action relating to Unleaded Gas, the goal of this piece is NOT to convince you to immediately short this volatile market
- The goal of this piece is merely to point out that a bearish case can be made, that traders should not dismiss it out of hand, and that traders should in fact be looking for an opportunity to play the short side
- Seasonality, trader sentiment, crude oil futures backwardation, and a historically high price range could be setting the stage for something that few seem to expect
Unleaded Gas price action is favorable - with a possible catch
The chart below displays daily price action for Unleaded Gas futures from late 2025. It would be difficult to rate price action as anything but "favorable" if we are being objective. The red line represents the 70-day exponential moving average. Note that there is nothing "magic" about a 70-day exponential average; I just like to use it to designate the "trading trend" (i.e., only trade the long side above the MA, only trade the short side below the MA) because almost no one else does.

