Some analysts have projected gasoline prices to go as high as $5/gallon over the coming months, noting a world-wide crunch of spare oil production capacity, rising demand from developing countries, and typically high U.S. demand during summer months.

Recently, however, some analysts have suggested that U.S. gasoline prices may have peaked for 2012, and recent surveys from AAA and DOE suggest gas prices have slipped this week, which may in part be a result of worse-than-expected economic news out of the U.S., Europe, and China. The national average retail price for a gallon of gasoline was $3.90 as of April 10^th, according to GasBuddy.com.

Richard Newell of Duke University, former head of the EIA under President Obama, told POLITICO [sub. req.] that “current projections for wholesale gasoline show gas prices falling 40 cents a gallon by Election Day.” Bob van der Valk, an independent petroleum industry consultant, told the Los Angeles Times that “if the nation can get through the summer months without major hurricane damage and without a new military conflict in the Middle East, ‘we should see the average price for gasoline in the U.S. drop back down to under $3 per gallon.’”

Where are gasoline prices heading? What factors are influencing gas prices? What should policymakers do to control those factors?