Sundance film in theaters now. It’s not pretty.

Tom Kloza of OPIS answers questions you wish you could ask, and that media should be asking.

Where are gasoline prices headed for the rest of the year?

On a short term basis, they are clearly headed lower, particularly in some high priced states such as California, Alaska, Hawaii, New York, and Connecticut. There is enough current momentum to drive nationwide retail prices toward a $2.30-$2.40 gal range, perhaps by Columbus Day.

Prices do typically find a seasonal bottom in November, December, or January, and I suspect that bottom will be somewhere between $2.20-$2.30 gal.

But there’s an interesting caveat: within another 45 days, we will see 2009 street prices that are higher than the pump prices on the same days in 2008. That says much about the severity of the 2008 decline which was indeed unprecedented. Street prices dropped from $3.62 gal on October 1, 2008 to $2.18 gal by November 13.

2010 is hard to predict. Major banks predict $55 or $95 per barrel. Either one or both could be right.

Morgan now predicts $105/barrel in 2012, up from its previous forecast of $95. (tightening spare capacity, per research note.)

“Assuming that demand returns to growth, we see global spare capacity back to 2007/08 levels by 2012, and getting even tighter thereafter,” Morgan Stanley said.

Morgan assumes oil demand will fall by 2 million barrels this year, go up by 1 million next year, then grow 1 percent thereafter.

Cash for Clunkers ended Aug. 24. US automaker Ford cashed in big time with its Focus and Escape. So did Toyota, Hyundai, and Honda. GM & Chrysler (not many gas-sippers available) were kinda left out.

But now what? Supplies are reduced, but automakers seem to think stability is coming. Production is increasing. Sales are improving. The worst seems to be over for all.