When it comes to U.S. energy prices, everything seems to be affected by demand. For instance, if there is a higher demand for oil, then the gas prices go up. Oddly enough the economic climate should have lowered the standard cost, but due to the demand in other countries, it's a lot higher then we would expect.

Looking back between 1978 to 2004, the rise in consumption was around 28.6%. If you like numbers, this year alone, China's increase was 25.8%. Even the demand in South Korea has skyrocketed over the years by nearly 344%. It's to imagine that right before we hit the new millennium, the cost for a barrel of oil was only $12. Today it is roughly around $70.

The price of crude oil directly influences the cost of other fuels. Whether it be for production or generation, crude oil and other fossil fuels are vital to electricity, gasoline, and petroleum. Although oil prices dropped in the first half of 2009, due to a fall in consumption of 1.25 million barrels a day, the price will rise again in 2010 as industry recovers from the recession and demand begins to rise once more.

The good news is we can expect it to drop again around the fourth quarter of 2009. Unfortunately, when the prices do go back up, we can easily expect a 40c per gallon increase in between those times. While this may true on the gas side of the things, the electricity prices are supposed to decline by 2% thanks to cheaper fossil fuel prices.

Let's face it, as of right now the economy is unstable and the U.S. energy costs are even more uncertain. The only way for the demand to get lower is by companies and small businesses no longer being able to afford the spike in prices. This usually occurs when fuel prices rise and are considered to high. On the surface this would look like a complete downfall, but eventually everything will pick up again. What it comes down to is a difficult balance between crude oil sales and everyone relying on one another. Eventually we'll see the fuel prices rise again when the crude oil prices do.

When looking at electricity consumption through the first half of 2009, there was a large decrease. In fact, according to sources the decreases fell short of 5% by only .6% in the prior year. In the second part of 2009 though, the decline has leveled out to around 2.3%. Hopefully the prices can remain low for the remainder of the year. When the economy settles though, the industry will start to receive their increase in costs once again.

The economy is mentioned constantly in relation to U.S. energy prices. As the international recession is far from over, it is expected to take at least a year for demand for fuel to rise back to the peaks of previous years. Since early 2008, prices have steadily declined in response to the sudden uncertainty in finance and industry that had led to worldwide economic recession.

Probably the worst part about crude oil prices is that they try to predict where the economy is going. If by chance it looks as though things are going to turnaround, all the sudden the prices rise. Then again, if by chance there is more hardship along the way, the costs either stay the same or drop. A good example is the unemployment world. The benefit claims have declined over the recent months, but the unemployment is still at an unhealthy level.

Oddly enough, the lowered demand for energy has still left the fuel stockpile prices higher then we expected. Keep in mind this is lowering the price since more is available. However, items such as natural gas have reached a new 5-year high. Thinking ahead; it will be a long while before demand supersedes the supply and prices rise. If the industry stays encouraged during this time, it will be well on its way to recovery.

What it comes down to is the U.S. energy prices have declined due to the lack of demand. However, as long as the economy fluctuates throughout the world, prices will continue on their roller coaster ride. Early on in 2010 expect to see a gradual increase in gasoline costs, but for now, enjoy the decrease.

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Article Submitted By: Jerry C Dyess
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