Expect $3 a Gallon by US Memorial Day With Demand Increasing

Gas prices often begin to spike this time of year. Some experts believe that gas could approach $3 a gallon between Easter and US Memorial Day, the traditional start of the summer driving season.
Prices could tumble 75 cents a gallon to $1 a gallon by Labor Day if no hurricanes hit the Gulf of Mexico and nothing goes wrong in oil-producing nations.

Some price increase this time of year is expected as refiners partially shut down and retool to switch from winter gasoline formulas to summer formulas to meet evaporation standards. But an unusual confluence of events is driving the large difference between last year's price and this year's.

The outlook on Nigerian oil output remains uncertain, and Royal Dutch Shell, the largest foreign oil company operating in that country, has shut down nearly half of its Nigerian production, contributing to higher crude prices and wont resume operations until the country is safe enough for its workers.

Iran, the No. 2 oil producer in OPEC, also remains a potential source of concern. It has been referred to the U.N. Security Council over fears it may want to misuse its nuclear program to make weapons, but the council has been at odds over U.S.-led efforts to increase pressure on Iran.

The implementation of new fuel specifications by the U.S. Department of Energy could mean further volatility, and those specifications could keep prices elevated and inventories tight.