GULF PRODUCTS-Gasoline prices rise, production eyed

* Gasoline up, Saudi production boost eyed

* Fuel oil firm as supply tightens

* Gas oil steady, regional demand props market

DUBAI, June 18 (Reuters) - Middle East gasoline prices rose $3 this week as the possibility of a recovery in global demand lifted the market, but with Saudi Arabia expected to boost gasoline production in July the run up could face opposition.

Regional gasoline prices were pegged at $6.75 a barrel, traders said, versus $3.75 a barrel seen last week.

"It's (prices) running up along with global prices and the market's sentiment on the economy is also improving," said a Middle East based trader.

"But it will come off soon enough, at least once the euphoria dies down."

Gasoline consumption in the United States since the start of the driving season on Memorial Day has fallen by 2.6 percent or 252,000 barrels per day (bpd) compared to the same period in 2007, before oil started on a run that took it to within reach of $150 a barrel in July last year. [ID:nLI308253]

In the region, Saudi Arabia was expected to start producing gasoline from its $10.3 billion Rabigh Refining and Petrochemical Co 2380.SE (PetroRabigh) in July.

PetroRabigh an export-oriented joint venture between Saudi Aramco and Japan's Sumitomo Chemical (4005.T) will have the capacity to produce 60,000 bpd of high octane gasoline that will be converted from fuel oil. [ID:nLF543118]

Saudi Arabia's increased domestic production capabilities will ease the region's net gasoline deficit to around 240,000 bpd from 300,000 bpd, PFC Energy said in a report last week.

Traders are also watching closely how much the kingdom will contract to import in July before making any conclusions on the market.

"I don't want to make a call until they finalise their import requirements, no point jumping the gun, but it's likely going to be lower, question is how much lower?" a trader said.

FUEL OIL