U.S. government predicts gasoline price dip

WASHINGTON (CNN) -- Gasoline prices should continue to fall modestly through the summer and could drop another dime per gallon by early fall, a U.S. Department of Energy official told Congress on Thursday.

The national average for a gallon of regular gasoline peaked at about $1.71 on May 14 but had declined to $1.65 by early June, thanks to increased refinery production, which has increased supply, according to DOE official John Cook.

"Since the end of March, production has increased significantly," said Cook, who is director of the petroleum division of the department's Energy Information Administration.

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"Barring further major refinery or other infrastructure problems, we expect prices to continue to decline this summer," Cook testified before a subcommittee of the House Government Reform Committee.

California and the Midwest saw the steepest price spikes for gasoline earlier this spring. But Cook said that refineries have boosted supplies to the Midwest while "imports have continued to stream into East Coast markets at an unprecedented pace. As a result, (gasoline) stocks have returned to the low end of the normal range nationally."

Cook's written testimony included a forecast indicating that by September, the national average price for a gallon of gas could fall to $1.55. He cautioned that gasoline markets remain exposed to volatility because global inventories of oil are likely to remain low.