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ENERGY Oil markets will remain highly volatile at least through June, despite OPEC's move to open its spigots and increase output. The fast-approaching June 30 deadline for handing over power in Iraq is raising oil traders' fears of terrorist attacks on key oil targets. Traders will probably keep oil around $40 a barrel the rest of the month. Expect oil prices to fall in mid-July to the $34 to $36 range, pushing the average price of gasoline down a dime or so from $2.05 now. Come fall, hurricanes also pose a threat to oil and gas supplies. Forecasters predict a heavy hurricane season in the Gulf of Mexico, potentially disrupting major refineries and offshore drilling platforms. Fuel prices would surge on news of serious damage to a major facility. The high cost of gasoline will dent retail sales in coming weeks. Folks have less money for other items, and some are curbing store trips. Most vulnerable: Distant shopping malls and some specialty shops serving customers who don't live nearby. Their sales will slow a bit in the second half. But neighborhood and Internet outlets will benefit. Some retailers are offering gasoline discounts to lure shoppers. Gas coupon programs and various tie-ins, such as $2 worth of free gas with each purchase of two rolls of film, are becoming popular promotions. So far, pricey gas isn't sinking sales of sport-utility vehicles. Automakers' discounts are buoying SUVs, as May sales figures prove. That's good news for auto firms, which derive healthy profits from SUVs. Automakers will rely on more incentives this summer to help sales of SUVs, hoping to offset any buyer's reluctance due to high gas prices. POLITICS Remember term limits? A lot of politicians hope you don't. The movement to curb the tenures of officeholders at the federal, state and local levels was red hot in the 199Os but is stone cold now. The economic downturn at the turn of the millennium, the 9/11 attacks, Iraq and other events served to divert the attention of most Americans. Few candidates now feel any pressure to voluntarily limit terms. In fact, the pendulum has swung, with voters now valuing experience. Only 11 members of Congress remain bound by limits, one-fourth the number 10 years ago. Though most who vowed to limit their terms honored their pledges, 13 did not, and ALL of the 13 were reelected. Term limits are also fading at the state level. Of the 21 states that adopted term limits for state lawmakers, five have dropped them. Others will follow suit or will at least permit more years of service. The last bastions are mostly at the local level. 300 cities, including NYC and L.A. , still have them, and few plan to ditch them. CIA Director George Tenet's resignation will fuel more probing of U.S. intelligence operations by Congress. After years of neglect and turf battles, the CIA and sibling agencies are ripe for an overhaul. Lawmakers are eager for reform, but may not be up to the task. They'd have to put politics aside. . .impossible in an election year. That's also the reason a new director won't be named until after Nov. Your very t fi y, June 4, 2004 THE K ' INGER WASH GTON ITORS Copyright 2004. The Kiplinger Washington Editors,Inc. Quotation for political or commercial use is not permitted. Duplicating an entire issue for sharing with others,by any means,is illegal. Photocopying of individual items for internal use is permitted for registrants with the Copyright Clearance Center,222 Rosewood Drive,Danvers,MA 01923. For details,call 978-750-8400 or visit www.copyright.com.