Why gas prices may have peaked

NEW YORK (CNNMoney) -- After one of the fastest and steepest runups in recent memory, it's possible gasoline prices may have peaked.

Retail gas prices fell more than half a cent Friday to a nationwide average just above $3.90 a gallon, according to AAA, continuing a decline started late last week that has shaved almost 4 cents off the price of gas.

The decline mirrors a moderate drop in crude oil prices, which account for roughly 70% of the cost of gas.

Crude prices have fallen for a few reasons, but the biggest is Iran's decision to negotiate over its nuclear program.

Gas spending and prices by state

"All of the bad things we were really worried about don't look like they will happen," said Kevin Lindemer, an independent energy consultant that has worked for Irving Oil and Cambridge Energy Research Associates. "If we have an uneventful summer, there's nothing fundamental that should cause prices to go much higher."

But having an uneventful summer is still a big if.

Iran could walk out of the nuclear negotiations -- beginning Saturday in Istanbul -- at any time. A hurricane could hit the Gulf of Mexico. Protests could again rock the Middle East.

But barring a big event, it appears the world is adequately supplied with crude oil.

"Oil prices should fall," said Chris Lafakis, an economist at Moody's Analytics. "That should provide a tail wind for the economy."

As tensions ease with Iran, markets become less fearful of a major disruption in oil supplies. Iran, after all, has repeatedly threatened to close the Strait of Hormuz, through which a fifth of the world's oil passes.

But there are other factors pushing down oil prices as well.

Saudi Arabia: Assurances from Saudi Arabia that the country stands ready to cover any loss of oil from Iran due to tightening sanctions appears to have calmed markets.

The economy: A weaker jobs report from the United Sates last week and growing fears of a slowdown in China are tempering demand projections. High prices and better fuel efficiency in the United States have also been cutting into demand.

Pipeline reversal: Pipeline operator Enbridge plans to reverse the flow of a pipeline in the U.S. Midwest.

The pipeline currently brings oil from the Gulf of Mexico to Cushing, Okla., where there is a bottleneck of supplies. Reversing that flow will add another 400,000 barrels a day to global oil markets.

Return of offline supplies: On Thursday, the International Energy Agency said it expects some of the 1.1 million barrels of oil a day that's currently offline from places such as Canada, the North Sea, and South Sudan will return to world markets in the second half of the year. IEA expects an additional 700,000 barrels a day in oil production from non-OPEC countries in 2012.

IEA also notes that OPEC production is at 3-1/2-year highs.

"Amid rising actual OPEC production, and a sizeable implied build in global stocks, prices have subsequently eased," the agency said in its report. "For now at least, the earlier tide of remorseless market tightening looks to have turned."

Caution ahead: However, all analysts warn that the situation can turn quickly, and some remain skeptical that Iran will stay out of the headlines throughout the summer.

"The odds of a military conflict are higher than what's being discounted today," said Robert McNally of the Rapidan Group, an energy consultancy. "I think the market is relatively complacent."

Gasoline prices could also rise as the industry switches over from winter gas to cleaner summer blends.

Tom Kloza, chief oil analyst at the Oil Price Information Service, noted that the switch currently underway in the Chicago region led to a 40 cent spike in prices there.

Despite the recent dip in gas prices nationally, Kloza is sticking to his earlier prediction for a national average of $4.25 a gallon by Memorial Day -- which would be a new record high.