ANALYSIS-Oil takes back seat to economy in U.S. election

By Chris Baltimore

WASHINGTON, Oct 18 (Reuters) - Despite record-high oil prices near $90 a barrel, energy issues will likely take a back seat in the 2008 U.S. presidential election to more pressing pocketbook concerns like plummeting home values, experts say.

Even before oil prices neared their inflation-adjusted peak of $101.70 per barrel hit in April 1980, a year after the Iranian revolution, most presidential candidates had weaved themes like U.S. energy independence into their stump speeches.

But even if U.S. gasoline prices hit yet-unseen levels above $3.50 per gallon (92 cents per litre), energy is unlikely to rise to a forefront issue in the campaign for the November 2008 election, analysts say.

"For a lot of Americans, paying $4 for gasoline is going to be painful but what they're going to look at is their major asset -- their house," said David Kirsch, a manager at PFC Energy, a Washington consultancy.

With a raft of top-tier issues like the war in Iraq, health care and home prices clamoring for voters' attention, energy could get lost in the shuffle, barring a catastrophic supply disruption, experts said.

According to U.S. government data, the average gasoline price is $2.76 a gallon, near a 6-month low and far from its record of $3.22 hit in May. Prices could rise as soaring crude oil costs filter through the supply chain to consumers.

Politicians, especially incumbents, keep a close eye on gasoline prices and "the conventional wisdom is that high gasoline prices will always kill an incumbent regardless of anything else," said Jerry Taylor of the Cato Institute.

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