April 13 (Bloomberg) -- Gasoline futures in New York traded near their highest price in two decades after the International Energy Agency increased its forecast for global petroleum demand for the sixth straight month.

Daily demand for gasoline, diesel and other fuel may rise 1.7 million barrels to almost 80.3 million barrels, the biggest gain since 1997, the Paris-based adviser to 26 countries said on Friday. The U.S. government estimates summer gasoline demand may rise 2.2 percent to a record 9.32 million barrels a day in the U.S., increasing concern about supplies, which fell 800,000 barrels in the week ended April 2 to 200.1 million barrels.

``If we get another draw in gasoline stocks, I wouldn't be surprised to see higher prices,'' said Dennis Kongsiri, vice president of Mitsui & Co. Energy Risk Management in Sydney. Prices that gained 39 percent in a year aren't curbing demand, he said. ``Demand is a bit more inelastic than people thought.''

Gasoline for May delivery traded at $1.1765 a gallon in after-hours electronic trading on the New York Mercantile Exchange at 9:11 a.m. Singapore time, down 0.3 percent from Monday's close of $1.1803 a gallon, the highest since the contract began in 1984. Futures climbed as high as $1.183 a gallon, a record intraday price, during floor trading Monday and ended 2.95 cents, or 2.6 percent, higher.

Analysis of price and volume charts showed the contract will keep rallying, said Al Bicoff, president of Technical Analytics Inc. in Highland Park, Illinois. Monday's gains accelerated after prices passed the previous record high of $1.1775, reached on March 31. The next major resistance point is $1.223 a gallon, based on a trend line that began Jan. 13, Bicoff said.

Refiners Rally

Shares of U.S. refiners tracked gains in gasoline futures. ConocoPhillips, the largest U.S. refiner, rose $1.24, or 1.7 percent, to $72.36 on the New York Stock Exchange. It was the highest since August 2002, when the company was formed by the merger of Conoco Inc. and Phillips Petroleum Co.

Valero Energy Corp., the third-largest U.S. oil refiner, rose $2.45, or 4.2 percent, to $60.25 in New York, the biggest one-day gain since Jan. 13.

The average U.S. retail price for regular gasoline rose 0.6 cent in the week ended Monday to a record $1.786 a gallon, according to a weekly Energy Department survey of about 900 filling stations. It was the third straight record and the ninth increase in 10 weeks.

Analyst Trilby Lundberg, whose research firm in Camarillo, California, tracks retail gasoline markets, said higher crude oil prices, strong gasoline demand and environmental rules are boosting prices.

Oil prices make up two-fifths of the retail gasoline price. The May crude-oil contract rose 70 cents, or 1.9 percent, to $37.84 a barrel on the Nymex, up 34 percent from a year ago. Should crude oil prices stay above $37, gasoline prices will stay where they are or rise, Lundberg said in a telephone interview.

Traffic Index

A U.S. Department of Transportation index of passenger traffic and freight shipments reached its highest level in 14 years in January, a signal that economic activity may keep strengthening, said John Silvia, chief economist for Wachovia Corp. in Charlotte, North Carolina. The index rose for the fifth straight month, the department reported last week.

Unusually high gasoline consumption ``is a function of the economy being stronger than expected, people taking on their second and third family cars and more driving,'' Silvia said. ``Also, with so much trade going on, more goods have to be shipped so they get loaded onto trucks.''

Driving Season

Futures were bolstered by concern declining inventories signal gasoline supplies may not be sufficient to meet peak demand during the summer driving season, which runs from late May to early September. Unseasonably strong demand during the first quarter hampered efforts to increase reserves.

U.S. gasoline stocks in the week ended April 2 slid 800,000 barrels to 200.1 million barrels, declining for the ninth week in 11, according to government data released last week. Inventories lagged the five-year average by 2.6 percent.

Strong gasoline demand blunted the effect of gains in imports and domestic production. Consumption averaged 9.249 million barrels a day, up 9.4 percent from a year earlier.

Concern new state and federal regulations have Balkanized the U.S. gasoline market, leaving the country vulnerable to regional supply disruptions, have also propelled futures higher in recent weeks.

California, New York and at least 15 other states have moved to ban the fuel additive methyl tertiary butyl ether, or MTBE, in cleaner-burning gasoline in favor of ethanol. U.S. regulations mandate use of oxygen-rich compounds such as MTBE and ethanol in reformulated fuel to make gasoline burn more completely, reducing emissions.

The use of ethanol increases blending and transportation costs because it must be shipped by barge or rail from the Midwest and blended with gasoline at terminals.

``Not only are inventories overall low, we've also got tighter regulations,'' said Michael Busby, manager of oil and refined-products trading for Northville Industries Corp. in Melville, New York. ``Every year the standards get stricter and that tightens the noose on supplies.''

To contact the reporter on this story: Sri Jegarajah in Singapore at sjegarajah@bloomberg.net and Soozhana Choi in New York at (1) schoi11@bloomberg.net.

Last Updated: April 12, 2004 21:40 EDT