US Products Outlook-Mogas seen softish as supplies ample

NEW YORK, May 12 (Reuters) - Gasoline is seen flat to weaker in most U.S. cash markets this week as supply increases ahead of the summer driving season as demand lags, traders said.

"Gasoline feels a little weaker," one New York Harbor trader said, seconding market outlook views from traders in the key U.S. Gulf Coast refinery row.

In the Gulf Coast, ample gasoline supplies are likely to keep values flat.

At half a dozen cargoes of European gasoline are arriving in the U.S. East Coast in the second half of this month, which should ensure a steady supply to the New York Harbor that keeps differentials from rising, traders say.

"Expect cash basis to remain relatively weak in most regional markets due to ample supply and soft demand," one market watcher said in his outlook for the coming two weeks.

Stephen Schork, Editor of The Schork Report, said in a report on Monday that due to weak crack spreads "current economics hardly justify gasoline output maximization."

The latest data from the Energy Information Administration, showed finished gasoline production plunged while imports jumped to a 42-week high, Schork noted. According to the data, U.S. gasoline inventories rose 800,000 barrels to 211.9 million barrels in the week to May 2. [EIA/S]

However, Midwest gasoline values will hold gains from last week, but is unlikely to climb any higher, traders said.

Gulf differentials remain well below benchmark June RBOB futures and imports of cheaper Gulf Coast gasoline are likely to keep values from getting too high, traders said.