A lot has happened since my last post.  The Governator has turned into the Sperminator; America has crowned an incarnation of Alfred E. Newman as the American Idol; and Kim Kardashian has found the man she had been saving herself for.

  But crude oil prices have been remarkably stable, or in the jargon of professional oil traders, the futures’ markets have been congestive. WTI crude has remained within a few dollars of $100 bbl and Brent crude has been in the $115 bbl neighborhood.

  We start the Memorial Day weekend, with nationwide gasoline prices just over $3.80 gal, down 7cts gal from last month, but up about $1.04 gal from last year. Here are a couple of projections and observations to consider during the weekend:

-         Gasoline prices should drift lower in the next 30 days. If asked to pinpoint average U.S. pump prices for unleaded regular over that time frame, I’d say we’ll see $3.50-$3.60 gal by June 27. The broader range might be $3.25-$3.75 gal.

-         The difference between the best prices available (at aggressive big boxes and “new era” retailers) and the average prices will be huge over the holiday. In California, you can find gasoline from Costco and other unbranded sellers some 30cts gal cheaper than major brand stations. Huge gaps are seen in other parts of the country.

-         The notion that this weekend begins the “driving season” is a bit silly. Gasoline demand isn’t particularly lumpy between now and September. Motorists will buy large amounts of fuel this weekend, but the next three weeks don’t really see much change from typical April or May consumption habits. July and August represent the true “driving season.”

-         One reason that leads me to project lower gas prices into June is that refinery margins are currently off the charts. One might typically see Gulf Coast refiners sell gasoline for about $8 bbl more than the price of sweet crude, with $10-$15 bbl margins in the Midwest, and $15-$20 bbl a typical operating margin on the West Coast. As I write this, gasoline at the refinery gate sells for anywhere from $22 bbl over sweet crude at the Gulf Coast, to as much as $35 bbl over crude in the upper Great Lakes. These margins are not the result of collusion or manipulation, but come after a cluster of operational problems in April and May.  Simply put, one refiner’s local hell is another refiner’s heaven.

-         Midwestern pump prices have seesawed wildly in recent weeks because many of the refining issues took place in Great Lakes states or in Oklahoma and Kansas. This is not a structural long term problem. Hence, the sharpest downdrafts by summer’s debut should be in heartland states.

-         Gasoline retailers have had a big inning, but that inning comes after plenty of winter and early spring misery. Yes, there are some markets where retailers are selling fuel at gross margins of 30-45cts gal. The standard mark-up is around 12-17cts gal, and credit card costs eat up 2-4% of the gross margin. We can expect to see retail margins ease in the next 30 days, and that might account for a 10-15cts gal drop, even if world crude oil prices don’t change.

-         Investment banks trumpeted a return of $120-$140 bbl crude earlier this week, but most don’t see those levels being reached until late 2011, or more likely, 2012. Almost all investment banks believe that refinery margins will be squeezed since crude will be the major bottleneck, and gasoline demand will remain flat or soften. I do expect a surge in crude oil (and gasoline) prices that will begin around NFL playoff time and end during the first third of the 2012 baseball season. But barring summer hurricanes, those $4.00 gal pump prices for regular (in the continental U.S.) should not reappear in the next 100 days.

-         As I have said many times this spring, gasoline prices will trend lower once all the crappy blockbuster Hollywood movies debut.