Gov't says lower GDP growth means lower oil prices

NEW YORK

The Energy Department said Wednesday that it expects the nation's gross domestic product to grow by 2.8 percent this year and by 2.3 percent in 2011.

The projections in the Energy Information Administration's monthly Short-Term Energy Outlook are down from GDP growth forecasts of 3.1 percent and 2.7 percent for 2010 and 2011 in the previous Outlook.

EIA said The spot price of benchmark crude oil should average $77 a barrel in the fourth quarter and $82 a barrel next year, down slightly from the forecast a month ago.

The average price of a gallon of gasoline in the second half of the year should be $2.69, down seven cents from the first half. EIA sees the price rising to $2.90 a gallon in 2011.

The Outlook pegs natural gas at $4.54 per million BTU this year, up 60 cents from the 2009 average, down 15 cents from the August forecast. That could rise to $4.76 per million BTU next year.

EIA's outlook for annual residential electricity prices is about the same as last month's forecast, at 11.6 cents per kilowatt-hour this year and 11.9 cents in 2011.