"Retail gasoline prices are poised to surge to unprecedented levels before the spring is out," said the report by the Energy Information Administration.
It said U.S. gasoline stocks "remain alarmingly low" and as far as the gasoline market is concerned the country "is moving into uncharted territory."
And government analysts forecast that if higher oil production is put off until the fall, there likely will be a repeat of the soaring heating-oil prices that have plagued the Northeast this winter.
"World oil prices should remain high for most of the year as inventories are expected to remain low, even with an assumed increase in OPEC production of 1 million barrels per day," the government analysis said.
The forecast by the Energy Department's statistical agency said gasoline prices, already nudging near $1.50 a gallon on average nationwide, well continue to increase and could easily reach the $1.75 to $1.80 a gallon range during the peak driving summer months -- and spike even higher in some areas.
An oil production increase of 1.7 million barrels worldwide using one hypothetical scenario put into place immediately could drive down oil prices from nearly $32 a barrel to $25.50 a barrel, the agency said. But even that would not impact gasoline prices this summer, it added.
Members of the Organization of Petroleum Exporting Countries are scheduled to meet March 27 to decide whether to increase oil production and ease an acute crude-oil shortage worldwide. Worldwide consumption is 2 million barrels a day greater than supply. A barrel is 42 gallons.
Three major producers -- Saudi Arabia, Venezuela and Mexico -- have already said they will recommend some production increases and another producer, Kuwait, has signaled a willingness to go along.
But the analysis released Monday by the Energy Department's statistical agency suggested that even major production increases of 2.5 million barrels a day, if begun immediately, would not head off significantly higher gasoline prices this summer.
The agency concluded that the additional oil would not show up in time to suppress gasoline prices as Americans take to the road for the summer -- historically the busiest driving season of the year.
That assumes an increase in oil production.
The analysis used a number of production scenarios, from OPEC's delaying additional oil production until the fall to a decision to pump an additional 2.5 million barrels a day, beginning in April.
None of the scenarios was shown to have much of an impact in short-term gasoline prices heading into the summer, said the source, who spoke on condition of anonymity. It would take time for the new supplies to work into the system.
Just over a year ag, OPEC oil producers cut production by 4.3 million barrels a day after seeing world oil prices plummet because of a supply glut.
Since then, oil prices have soared from $10.72 a barrel on Dec. 10, 1998, to $31.89 a barrel Monday on the New York Mercantile Exchange.
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