Analysts predict lower gas prices this summer

NEW YORK -- US motorists may get a break this year after two painful summers at the pump as easing supply bottlenecks and fewer refinery problems keep a lid on prices, analysts said this week.

US gasoline prices briefly hit $3.00 a gallon last summer as refiners struggled to meet new additive requirements and overcome operational difficulties related to hurricane damage in 2005.

This year, refiners have worked out some of the supply kinks associated with the shift away from suspected carcinogen MTBE toward ethanol as a gasoline additive, analysts said, bolstering consumer supplies .

"I don't think we anticipate the bottleneck problems we had last spring with ethanol. These things have a tendency to get worked out with time," said Neil Gamson, economist for the US Energy Information Administration.

Gasoline prices surged again last summer as crude hit a record over $78 a barrel in July, before falling as inventory levels began to bulge and the hurricane season failed to disrupt operations.

After a slow start to the winter, companies were able to build a healthy level of heating oil inventories and move maintenance normally done in spring to January and February.

While the early maintenance and strong demand have helped draw down gasoline inventories to 4.7 million barrels below year-ago levels last week, analysts say once they return they will have ample time to replenish stocks.

As of Feb. 23, gasoline stockpiles were running at 220.2 million barrels, according to the latest EIA data.

"When these guys come back they are not going to be producing heating oil they are going to be producing gasoline," said Katherine Spector, vice president of energy research at J.P. Morgan Securities Inc.