Veteran commodities strategist Jeff Currie said average US gasoline prices will almost certainly hit $5 a gallon before the midterm elections, citing a toxic combination of scarcity and currency debasement. Shortages that began in refined products are now spreading upstream into crude oil as the energy shock reaches a dangerous new phase, according to Currie, founder and CEO of Real Macro, who built his name on Wall Street at Goldman Sachs Group Inc.

"Crude is the signal, and now we think about products — they are the noise," Currie said Friday on Bloomberg Television's Surveillance. Gasoline at $5 a gallon is an important psychological marker, especially with control of Congress hanging in the balance in the Nov. 3 midterm balloting.

Prices at retail pumps haven't topped that level since the jump in post-pandemic inflation in 2022, but the recent flare-up in the US-Iran war pushed the average to more than $4.29 a gallon as of Thursday. Diesel topped $6 a gallon for the first time.

Currie put the probability of $5 gas by Election Day as "extremely high," warning that refineries cycling between diesel and gasoline output will eventually exhaust their operational flexibility. In addition, Strategic Petroleum Reserve releases show no sign of being renewed, he said. US diesel could reach $7 to $9 a gallon, Currie said.