The economic forecast for the remainder of 2010 and 2011—a forecast which now predicts slower than expected growth, more unemployment and another drop in the GDP—will have a direct effect on the price of crude oil in this country. In its most recent crude oil price forecast, the United States Energy Department has predicted that the price per barrel of crude oil will only average $77.37 for the remainder of 2010, as opposed to the earlier (August) prediction of $79.13. In addition, the updated crude oil price forecast for 2011 now stands at $82 dollars a barrel and not the $83.50 mark which was predicted only a month ago.

Examining the Crude Oil Price Forecast

When asked why the crude oil price expectations were lowered, a spokesperson for the Department of Energy in Washington DC pointed solely to the similarly poor expectations for the Gross Domestic Product. Before the recent numbers were released, the GDP was expected to grow by 3.1 percent in 2010 and another 2.7 percent in 2011, but now the forecasts are calling for increases of only 2.8 percent and 2.3 percent respectively for 2010 and 2011. These numbers will be reflected in the daily crude oil prices going forward.

The demand for crude oil, both in the United States and globally, has risen since 2009, but risen much more slowly than many experts had predicted. In the United States, for example, the demand for crude oil rose only by about 1 percent, while earlier figures had the number closer to 2 percent.

What This Means at the Pump

The drop in the crude oil price forecast will also mean a savings for drivers at the gas pumps. Nationwide the price of gas is expected to average right around $2.76 a gallon through the end of 2010, down 4 percent from earlier predictions, yet still up 13 percent from the 2009 averages.

Crude Oil Price Forecast: Putting It All Together

There can be no doubt that the reduction in the crude oil price forecast is a direct result of an economy that continues to struggle. With Oliver's prediction of the coming financial crisis in the U.S., don't look for economic strength to translate into higher oil demand any time soon. Recent unemployment figures show that more than 9 people out of 100 still cannot find work in this country. What all this equates to is a marked decrease in the demand for oil and gasoline, and as with any consumer goods, a reduction in demand usually means lower prices.