With Memorial Day over and the driving season underway, let's take a look at how our gasoline supplies stand compared to past years. Obviously with higher supply available, prices will be somewhat limited to high they go.

Gasoline supply and retail prices going into Memorial Day weekend:
2010: 220.0 million barrels (estimated), $2.751/gal average
2009: 203.2 million barrels (actual), $2.453/gal average
2008: 209.0 million barrels (actual), $3.956/gal average
2007: 198.0 million barrels (actual), $3.194/gal average
2006: 209.7 million barrels (actual), $2.838/gal average
2005: 216.7 million barrels (actual), $2.077/gal average
2004: 204.3 million barrels (actual), $2.031/gal average
2003: 207.3 million barrels (actual), $1.460/gal average
2002: 215.9 million barrels (actual), $1.362/gal average
2001: 208.0 million barrels (actual), $1.775/gal average
2000: 201.0 million barrels (actual), $1.579/gal average

Ten year average, 208.4 million barrels, $2.315/gal average.

Looking at where prices stand now, I'd say that the U.S. average will fall into the $2.60's before stabilizing. States featuring the lowest gasoline prices in the nation will likely begin to rise. Ohio shouldn't expect prices to remain below an average of $2.50, as many stations there are selling at a loss. On the other hand, prices out West may tick higher after a rally late last week propelled wholesale prices up.

Overall, I'm now forecasting that the U.S. average remain between $2.70-$2.90 for most of the summer, barring a major hurricane which has the impact to push prices up 10-25 cents per gallon.

We certainly got a nice break this year between the beginning of May when prices approached $2.95/gal. By Memorial Day, retail prices had dropped nearly 20-cents per gallon to $2.75/gal.