UPDATE 1-US gasoline stocks surge as refiners ramp up-API

(Updates with details)

NEW YORK, June 23 (Reuters) - U.S. gasoline stockpiles surged last week as the nation's refiners pumped up production and imports to meet summer vacation demand, the American Petroleum Institute said on Tuesday.

Commercial gasoline stocks rose 3.7 million barrels against expectations of a 1.3-million-barrel increase, as refiners raise utilization rates by 1.9 percentage points and product imports rose 92,000 barrels per day, the API said.

U.S. gasoline demand tends to peak in the summer as vacationers hit the highways, but consumption is expected to be softer this year due to the effects of the economic recession, analysts have said.

"The API report is obviously a bearish report and it reflects concern that demand, particularly for gasoline, is poor," said Phil Flynn, analyst at Alaron Trading in Chicago. "This has slowed the earlier momentum to the upside that the energy markets have seen today."

Crude stockpiles, meanwhile, fell by 72,000 barrels against expectations of a 1.0-million-barrel decline, and distillate inventories rose 2.3 million barrels against expectations of an 800,000-barrel build, the API report showed.

Crude oil futures CLc1 on the New York Mercantile Exchange traded up $1.35 to $68.85 a barrel after the report, down from the days' peak of $69.68.

The U.S. Energy Information Administration will release a separate survey of the nation's energy inventories on Wednesday morning.

(Reporting by Richard Valdmanis and Gene Ramos in New York; Editing by David Gregorio)