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LONDON, March 14 (Reuters) Oil prices dropped below $62 on Tuesday as forecasts for lower global oil demand growth offset concerns U.S. gasoline supplies might be strained by the upcoming driving season.

Oil's prolonged rally has hit consumption in southeast Asia, where demand had been booming, leading the International Energy Agency (IEA) to cut global demand growth in 2006 by 290,000 barrels per day (bpd) to 1.49 million bpd.

At the same time, producers have boosted spare capacity which will lessen, but not remove, one of the factors that has pushed oil above $60, the energy adviser to 26 industrialised nations said.

But it also cautioned that the market's four-year bull run could be far from over.

''While there is reason to expect prices to soften if everything runs smoothly, the reality is that limited spare capacity and a bumpy road ahead are likely to support prices for some time,'' the IEA said in the editorial of its monthly report.

U.S. crude was down 21 cents at $61.56 a barrel by 0954 GMT, having touched a one-week high of $62.15 earlier. London Brent eased 15 cents to $62.05.

''On balance things look a bit looser compared to the last IEA report,'' said Kevin Norrish of Barclays Capital. ''But the tone of the editorial is supportive in the medium term.'' Prices climbed by well over $1 on Monday after slumping nearly $4 last week after the Organization of Petroleum Exporting Countries vowed to keep pumping flat-out despite U.S. stocks reaching their highest levels since May 1999.

Consumer fear U.S. gasoline will be in short supply has played a big part in the price recovery over the past days.

Upgrades required for new lower sulphur product specifications have hit U.S. refinery output and pushed up prices as companies scramble to crank up capacity before the summer driving season.

''We're at the lowest available output I've seen in maintenance season for some years,'' said David Thurtell of the Commonwealth Bank of Australia.

NYMEX gasoline rose 1.97 cents at $1.7607 a gallon.

U.S. President George W. Bush also stoked the fire on Monday by accusing Iran of helping to foment violence in neighbouring Iraq, just as the U.N. Security Council considers a tough approach to reining in Iran's nuclear ambitions.

The United States, Britain and France will brief all 15 members of the Council later on Tuesday, pushing a statement that would call on Iran to stop all uranium enrichment-related activities, which they believe are linked to weapon-making.

Analysts also said the ongoing loss of about one fifth of Nigeria's crude oil production following militant attacks was supporting prices and that it remained unclear when supplies would return to normal.

REUTERS SR PM1842