U.S. energy prices are greatly affected by industry demand. The higher the demand for fuel, the more expensive it becomes. Although the economic climate of 2009 should have reduced U.S. energy prices, growing demand for crude oil in other countries has kept the price much higher than is desirable.

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.

While the economy remains unstable, U.S. energy prices will be less certain. In the supply and demand chain, if fuel prices suddenly rise too high, demand will decrease as smaller businesses and companies can no longer afford production. However, while prices are on the decline it will help industry pick up again as their profits increase. The delicate balance should be maintained by both crude oil sales and industry relying on each other. Undoubtedly, as the economy picks up speed once more, crude oil prices will increase. It is only a matter of time before other fuel prices follow.

We saw a huge fall in electricity consumption the first part of 2009 due to businesses and households cutting back to save money. The economy is also to blame for the 4.4% decrease from 2008. By the second half of 2009 though, this decline leveled out at a 2.3% decrease, and it looks as though the U.S. prices will remain lower until the end of the year. Once the economy settles down, the industry will be able to improve and build upon rising costs once again. Then again, electricity prices are estimated to decline by 2% in 2010.

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.

Crude oil prices seem to try to preempt the economy at every step of the way. When figures were released to suggest that the U.S. economy was recovering, prices jumped up, boosting the retail price of gasoline and petroleum. However, these prices dropped again almost immediately as it was made clear that a select amount of data was not the go ahead for a stable economy. For instance, although unemployment benefit claims have declined, the levels of unemployment at still not at a healthy level. While the economy recovers, U.S. energy prices will remain volatile.

It's hard to believe the lower demand for energy has left fuel prices higher then we would believe. Then again, as long as there is an ample supply available, you can expect the costs to go down. Natural gas however has reached a new 5-year high. Needless to say it's going to be awhile before the demand actually over trumps the supply. In the end the industry has to stay encouraged in order for us to see it recover.

Overall, U.S. energy prices have seen a decline in response to the lack of demand from industry and exports. While the worldwide economy stays uncertain, prices will only be able to rise so much before being cut back again. Electricity and gasoline prices have decreased in the fourth quarter of 2009 and will stay low in early 2010 before seeing gradual rise before the end of the year.