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* Lower oil prices to raise 2011 U.S. oil, gasoline demand
* Expected cheaper gasoline to encourage more U.S. driving
* Stronger U.S. oil demand seen raising global oil use
By Tom Doggett
WASHINGTON, May 9 (Reuters) - U.S. Energy Information Administration analysts scrambled on Monday to update the agency's upcoming monthly energy forecast to reflect last week's big drop in oil prices, which is expected to result in higher U.S. and global oil demand.
The EIA report will be released on Tuesday and is one of three closely watched forecasts that will be issued this week on global oil supply and demand estimates.
OPEC will release its oil forecast on Wednesday, followed by the International Energy Agency on Thursday.
The EIA's forecast is usually submitted for review among agency staff several weeks before its official release date.
However, the EIA had to do a rewrite after U.S. oil prices fell almost $17 a barrel, or some 15 percent, last week.
"What happened last week to the oil price will be reflected," said one EIA analyst, referring to the agency's new supply and demand forecast.
EIA staffers working on the forecast met on Monday to discuss what parts of the report should be updated because of the lower oil price.
Phil Flynn, energy analyst at PFGBest Research in Chicago, said he expected the big oil decline will mean much higher U.S. oil demand.
"The EIA has to significantly change their outlook because of this drop in price," he said.
When last month's EIA forecast was released, the thinking among many analysts was oil could go to $120 barrel. "Now we're not even sure we're going to be able to hold $100," he said.
The lower oil prices should soon translate into cheaper gasoline prices that will encourage more driving, pushing U.S. gasoline demand higher. "The summer vacation has been saved at the last minute," said Flynn.
The stronger U.S. gasoline demand will likely be big enough to cause EIA to revise up global oil demand for this year. "I think the U.S. number will push us over the top," Flynn said.
However, Guy Caruso, energy analyst at the Center for Strategic and International Studies and former head of the EIA, said, "It's probably too early to count on the price drop to hold."
Indeed, U.S. oil prices rose $5.37 a barrel on Monday in a wave of bargain hunting.
Nevertheless, Caruso said he expected the EIA forecast to show about a 200,000 bpd bump in world oil demand for 2011.
He noted that the U.S. economy is still expected to have fairly moderate growth, which should increase fuel demand.
The EIA last month increased its forecast for global oil demand this year by 10,000 bpd, from the previous month's forecast, to a record 88.2 million bpd.
The demand forecast from the EIA is usually in the middle of the OPEC and IEA demand outlooks.
OPEC left unchanged its forecast that global oil demand will increase 1.4 million bpd this year to 87.9 million bpd. The IEA also kept its global oil demand growth estimate unchanged at 1.4 million bpd to reach 89.4 million bpd this year.
The EIA last month increased its forecast for global oil demand growth this year by 10,000 bpd to 1.52 million BPD from the previous month's forecast to record demand of 88.2 million bpd.
Editing by Cynthia Osterman