Bullish New York gasoline futures are a bad sign for pump prices

New York gasoline markets are rallying, which could signal a return to gains at the retail pump.

Gasoline futures are trading at their highest level since August, and the November-December spread is the most bullish on record.

On Tuesday, the average price for a gallon of regular gasoline in Spokane was $4.59 and $5.50 for diesel.

In Coeur d’Alene, the average price for a gallon of regular gasoline was $4.32 and $5.26 for diesel, according to AAA.

Supplies have tightened amid the traditional off-peak driving season, pushing New York wholesale premiums to their highest level in almost two months, and putting pressure on pump prices at a politically sensitive time.

Voting has begun in midterm elections where inflation and the economy are top issues for many deciding if Democrats will maintain control of Congress.

Pump prices in the U.S. have largely declined this month, according to auto club AAA.

Capping fuel costs – a main contributor to historic inflation in recent months – has been a top priority of the Biden administration, which is considering additional oil releases from emergency reserves along with more radical measures.

In New York, a state gasoline tax break is set to end at the beginning of December, adding 16 cents per gallon to pump prices overnight.

But fuel supply has remained tight, particularly in the New York Harbor region, where inventories have dwindled to their lowest in a decade for this time of year.

New York relies on Europe for a good chunk of its gasoline supply, and imports have slowed amid maintenance and refinery strikes on the continent that’s facing its own energy crisis.