The Energy Department is forecasting that gasoline prices this summer will average about $2.81. That's three cents cheaper than last year's average.
The average price at the pump is already within a penny of the summer forecast, even though Memorial Day is still seven weeks away. The Energy Department's Tancred Lidderdale says pump prices have jumped more than 60 cents a gallon over the last 10 weeks.
"This price runup certainly happened earlier than usual," Lidderdale said.
That means big profits for the refineries that are making gasoline. But as more refiners pick up the pace, gasoline prices should level off. The Energy Department expects gasoline prices to hit their summer peak next month.
That's assuming that crude oil prices average in the $65-a-barrel range — lower than last year, but slightly above where they are now.
Lidderdale says crude oil prices are one of the hardest things to predict. They've see-sawed from as low as $50-a-barrel to as high as $66-a-barrel in just the last three months.
With ongoing uncertainty in the Persian Gulf, and growing demand for oil in the U.S. and China, Lidderdale says, the market is likely to remain tight.
"That's going to be our buzz word for the summer, is the market's going to stay tight," Lidderdale said. "And what that means is any unexpected disruption to supplies or any unexpected surge in consumption can have some significant impact on prices."
Even as oil and gasoline prices bounce around, consumer demand for gasoline has continued its steady increase. Except for the severe price shock following the 2005 hurricanes, no amount of pain at the gas pump seems to keep American drivers off the road.