US EIA forecasts high gasoline demand, prices

(Adds quote, paragraph 8) SAN ANTONIO, March 22 (Reuters) - The U.S. Energy Information Administration (EIA) on Monday forecast unrelenting gasoline demand and high prices for gasoline and natural gas this year. The EIA said U.S. gasoline demand will set a record in 2004, with 100,000 barrels per day (bpd) more than last year during the peak driving season, which traditionally begins in late May, EIA administrator Guy Caruso told the annual meeting of the National Petrochemical and Refiners Association. "That's going to be a challenge, of course, because of the increased specification changes in requirements phasing out of low sulphur," the MTBE phaseouts in New York and Connecticut and the continued transition in California, Caruso said. "It's going to be, we feel, a continued a tight market and therefore our outlook for prices and margins are continued strength in both those areas," Caruso said. The EIA forecast a U.S.average gasoline price of $1.67 per gallon for the full year 2004. Caruso said this figure is up 10 cents from EIA's projection released just last month. The EIA said its forecast for U.S. gasoline prices for April and May will be $1.83 per gallon for the national average due to fewer gasoline imports than last year. "We are really concerned about the inventory picture, as we go into the peak driving season with about 13 million barrels of gasoline inventory lower than we are projecting in our short-term model with gasoline at less than 200 million barrels," Caruso said. Part of the reason is that finished gasoline imports are down 119,000 bpd at 351,000 bpd this year, according to EIA, the statistics arm of the U.S.