U.S. Increases 2011 Crude Oil Price, Demand Estimates

"The Energy Department expects U.S. economic growth, fuel consumption."

The Energy Department increased its crude oil price forecast for 2011 on projections of greater U.S. economic growth and fuel consumption.

West Texas Intermediate oil, the U.S. benchmark, will average $85.17 a barrel next year, up from last month’s forecast of $83, according to the department's monthly Short-Term Energy Outlook, released today. Prices in 2010 will average $78.80, $0.83 higher than October's estimate of $77.97.

The department raised its outlook for global oil consumption next year to 87.77 million barrels a day from 87.44 million last month.

U.S. gross domestic product will grow 2.2% in 2011, up from projections of 2.1% a month ago, according to the report. The economy of the world's biggest-oil consuming country will climb 2.6% in 2010, which is unchanged from last month's estimate.

Demand for crude oil will climb 2.4% to 86.33 million this year, according to the report. The 2010 forecast was increased by 270,000 barrels from last month's projection.

U.S. oil consumption will average 19.16 million barrels a day next year, up 80,000 barrels from last month's forecast. This year's projection was bolstered by 70,000 barrels from the October report.

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