Gasoline prices will move slightly lower this summer, to an average of $1.56 a gallon nationwide, but only if foreign oil production remains at current high levels, the Energy Department predicted yesterday.

How far prices fall depends critically on production decisions by the Organization of Petroleum Exporting Countries and the timing of the return of Iraq's oil to global markets, government and industry analysts said.

The progress in the military campaign in Iraq has helped bring crude oil and gasoline prices down from prewar peaks. Gasoline reached $1.73 a gallon, a record for this time of year, just before the start of the war, and now stands at $1.63, according to the department's Energy Information Administration.

The forecast of $1.56 a gallon for this summer would be roughly the same as in the 2000 and 2001 summer seasons, but about 17 cents more than last year's average price, the energy administration said.

Crude oil prices were essentially unchanged yesterday as traders tried to sort out the postwar oil price scenario, but they are down 30 percent from prewar peaks. Oil for May delivery rose 4 cents, to $28, a barrel on the New York Mercantile Exchange, more than $10 below a 12-year high of $39.99 a barrel on Feb. 27.

The drop in oil prices is also fundamentally the result of a big increase of crude production by OPEC members and other oil-producing nations. Despite the loss of Iraq's 2 million barrels a day in crude oil exports because of the war, oil supplies are so plentiful that OPEC members are fearful of a potential glut that could push oil prices down to $20 a barrel later this year.

"OPEC ministers must be getting worried when they see how oil prices have fallen back in just a few weeks," said Peter Zipf, editor in chief of Platts Oilgram News.

The cartel's goal is to maintain oil prices of $22 to $28 a barrel. Now OPEC is saying its price target is slipping away, Zipf said. "They will presumably be thinking about cutting production. The question is, who is going to cut back and how?" he added.

OPEC called an emergency meeting for April 24 to consider a reduction in production quotas for its members. Analysts were unsure whether OPEC members can agree on a cutback at that session. But if that happens, it could stall the recent drop in gasoline prices just as the peak summer driving season arrives, said Guy F. Caruso, director of the Energy Information Administration.

A troubling issue is the lag between OPEC's production decisions and the impact of those decisions on fuel supplies in consuming nations. It takes 40 days for tankers to deliver Persian Gulf oil to U.S. refineries. An OPEC decision in early May to reduce shipments would begin to be felt in July -- a peak month for gasoline demand as motorists head away on vacations.

A resumption of Iraq's oil production by the summer, however, could offset lower output from Saudi Arabia and other OPEC producers, making it easier to rebuild depleted commercial gasoline inventories. Larger inventories increase the prospects for lower oil and gasoline prices, said Jay Saunders, an energy analyst with Deutsche Bank AG.

"The timing of Iraq's restart is crucial for the oil markets," Saunders and other Deutsche Bank analysts said in a market assessment yesterday.

Caruso said he hoped that OPEC production would continue at current levels through the end of the year. "We've got an uphill battle to meet the inventory requirements." The energy administration's forecast does not assume a resumption of Iraq's oil production this year because of all the unknowns about Iraq's postwar future, he added.

The Deutsche Bank analysts estimate that some Iraqi oil could be flowing within a month, and much of its production from southern fields could resume in two to three months. "If Iraq comes back quickly, and the Saudis and OPEC don't have time to react, crude prices are going to fall, and gasoline would, too," Saunders said.

A British Army Gazelle helicopter in the Rumaila oil fields on Sunday. Iraq's postwar abilities to export oil are still unknown.