Will average gas prices be above $4.00?

The AAA national average has entered a clear cooling phase, declining for three consecutive days from a peak of $3.983 on March 25 to $3.976 on Saturday, March 28. To resolve YES, the average must reverse this momentum and climb 2.5 cents in just 72 hours. Without a massive, immediate catalyst, this exceeds typical daily volatility for the national aggregate. Retail gas prices exhibit a rockets and feathers dynamic, typically lagging wholesale futures by three to seven days. While gasoline futures spiked 5% on Friday, March 27, the AAA print for Tuesday, March 31, will primarily reflect Monday's credit card transactions. This weekend lag makes it highly improbable that the wholesale spike will fully pass through to consumers in time for resolution. Significant supply-side interventions and geopolitical cooling are capping retail upside. The administration's announcement of a 172-million-barrel SPR release and the EPA's emergency E15 waiver are actively dampening prices. Additionally, the postponement of further U.S. action on Iran's energy sector until April 6 has temporarily removed the immediate geopolitical risk premium that drove prices higher earlier in the month.

Gasoline futures for April delivery surged nearly 5% to $3.29 per gallon on Friday, March 27, driven by ongoing tensions in the Strait of Hormuz. This massive wholesale spike acts as a coiled spring. If retailers aggressively pass through even 25% of these costs over the weekend, the 2.5-cent gap to $4.00 could close in a single reporting cycle. Seasonal demand is currently peaking as spring break travel coincides with the mandatory refinery switch to more expensive summer-blend gasoline. EIA data from late March showed gasoline demand increasing to 8.92 million barrels per day. This tightening supply-demand balance provides fundamental support for a sharp upward correction in retail prices regardless of short-term technical dips. Regional price divergences could pull the weighted national average higher. California's regular gas hit $5.85 on March 28, and any localized supply disruptions in high-demand states over the weekend could exert enough upward pull on the national aggregate to cross the threshold, even if prices in the rest of the country remain stable.