NEW YORK, July 6: Prices at America's gasoline pumps may soon ease from record highs, returning smiles to drivers' faces, but economists say the spare cash won t spark spending sprees or prevent the economy from shifting to a lower gear, says Reuters.

Saudi Arabia this week shocked the world with its promise to pump 500.000 more barrels of oil per day to help keep soaring energy prices in check.

Coinciding with the July 4 US Independence Day holiday and the summer vacation season. the news pushed oil prices down more the SI to about $29 a barrel, spreading cheer to Americans who had been paying over $2 in some regions for a gallon of gasoline.

Assuming the deal goes through, motorists won't be cheering alone, however, economists said. Consumers and Federal Reserve inflation Fighters also should be pleased as the move will keep prices in line over the next few months on a wide variety of goods ranging from chemicals to airline tickets

Analysts had long expected oil-producing nations to give In to international pressure on rising prices and Saudi Arabia's

In fact, oil prices could be trading at even lower levels in September if Saudi Arabia follows through and raises supply in the weeks after the summer driving season ends and before winter demand for heating oil kicks in

Lower oil prices would also have a positive knock-on effect lor the nation's inflation rate, economists said.

The promise of lowered price pressures should set central bankers' hearts at ease as it would prove that their yearlong campaign to cool the economy's longest ever expansion with a string of interest rate hikes had been a success.

Some economists said the Saudi decision remains a wild card for Fed policymakers, leaving them unsure of the odds for another interest rate hike in August after a pause in June.

But they agreed that lower oil prices along would not trigger any dramatic policy changes because the economy's course will be more or less steady.

More important than oil prices. Wall Street is losing some momentum while income has been growing less rapidly than spending, economists said

announcement offers them proof they were right all along.

Now many are comfortable saying that US benchmark crude oil West Texas Intermediate will trade around S27 a barrel, down more than 20 per cent from its peak of S34.13 in early March.