Will gas reach $5 a gallon?

The new year has greeted Americans with the highest January gas prices ever, and some analysts say prices could get close to $5 a gallon in some areas during the warm-weather driving season.
 
The average price for a gallon of regular unleaded gasoline in the United States on Monday was $3.39, according to motorist group AAA. That's nearly 30 cents higher than a year ago.

The national average reached a peak of $4.114 in July 2008.
 
Experts say there are a variety of factors placing upward pressure on prices at the pump. For one thing, the U.S. economy appears to be in a modest recovery, heralding a likely uptick in gasoline demand.
GasBuddy.com expects bigger increases coming, predicting that the median U.S. gas price will stand at $3.95 a gallon in May.

Some cities could experience record prices by Memorial Day, GasBuddy says, with Chicago residents paying up to $4.95 a gallon and New Yorkers shelling out up to $4.55.

But other analysts say consumers may get some relief in the months to come.

Gas spending and prices by state

Richard Soultanian, co-president of NUS Consulting, said that barring a confrontation with Iran or some other disruption in the Middle East, some of the current risk premium in the market "is going to be leaking out." That should bring gas prices back to the low $3 range, he said.

Peter Beutel, an oil analyst at Cameron Hanover, said prices would likely drop by the end of February, since Iran is unlikely "to go through with any of its threats." He expects prices to bounce back beyond that, but was hesitant to make a precise prediction, saying consumers are likely in for another roller-coaster year.

"I don't see any way to get rid of volatility," he said.

Read more here: http://money.cnn.com/2012/01/16/markets/gas_prices/index.htm