Gasoline pump price relief nowhere in sight

WASHINGTON (Reuters) - Average U.S. gasoline pump prices -- already above $4 a gallon -- could run up 20 cents or more by mid-summer, if crude oil prices don't fall from record levels near $140 a barrel, analysts said.

Gasoline prices are up almost $1 from a year ago, heaping pressure on a U.S. economy beleaguered by falling home values, a sagging dollar and an anemic job market. Oil prices have risen six-fold in the past six years and are up 40 percent since January.

For the first time ever, average retail U.S. pump prices tracked by the Energy Information Administration rose above $4 a gallon on Monday to average $4.04, up 96 cents from a year ago. California prices averaged $4.43 a gallon.

There are more gasoline price increases lurking in the fuel delivery chain, especially if U.S. refiners are able to boost historically low profit margins and pass more of their soaring crude oil costs along to consumers.

"There is still a very big upside potential to gasoline prices, because refining margins are not anywhere near where they were a year ago," said Fadel Gheit, an analyst with Oppenheimer & Co.

"By the middle of July, if oil prices don't go lower, we are going to see another pop of at least 20 cents," Gheit said of gasoline retail prices.

U.S. crude settled up $10.75 at $138.54 a barrel on Friday, after touching an all-time high of $139.12, in its biggest gain in dollar terms on record. U.S. oil futures were lower on Monday at about $136.50 a barrel.

If Friday's jump were fully priced into retail gasoline prices, they would increase about 25 cents a gallon, Gheit said.

So far, that hasn't happened because low demand for gasoline, as well as a mandate for refiners to use corn-blended ethanol, has kept U.S. refining margins weak, he said.

According to Credit Suisse, a U.S. Gulf Coast refinery can make about $16.03 from turning a barrel of oil into gasoline and other products. That's down from $28.59 a year ago.

So far, profit incentives to produce gasoline are so anemic that major refiners like Valero Energy Corp are shutting down gasoline-making equipment.

"They are all cutting (gasoline production) because they say they are not in the business of losing money," Gheit said. "They are not running a charity for the truckers and the motorists."

Oil prices could top $150 a barrel by July 4, one of the busiest U.S. travel holidays, as strong demand in Asia triggers a slowdown in shipments of crude to the United States, investment bank Morgan Stanley said last week.

A $150 oil price would equate to about $4.50 a gallon for gasoline, if refinery profit margins hold steady, according to Tancred Lidderdale, an analyst with the federal Energy Information Administration.

"It will be going higher," Lidderdale said about the national pump price. "The price will be going up, and it all depends on the price of crude oil." Crude oil prices comprise more than 70 percent of gasoline prices.

Such estimates vary, however. According to analysts at the Oil Price Information Service, a $150 oil price would yield a retail pump price in a range of $4.32 to $4.37 a gallon.

Consumption in the United States already has shown signs of faltering, even as the world's top consumer enters the summer vacation season, when gasoline demand generally peaks.

(Editing by Christian Wiessner)