The Energy Information Administration released its Short-term Energy Outlook for December last week, and ratcheted back its expected annual price for West Texas Intermediate crude oil to $100 bbl for 2008 from $101.45 a month ago, while dropping its projected 2009 WTI average price from $63.50 in November to $51 bbl.

“The increasing likelihood of a prolonged global economic downturn continues to dominate market perceptions, putting downward pressure on oil prices,” said the EIA.

World real gross domestic product growth is projected to slow to about 2.7 percent this year from roughly 4 percent in 2006 and 2007, and slide to 0.5 percent in 2009. The 2009 world real GDP was revised down from last month’s 1.8 percent growth rate projection.

The Energy Information Administration expects gasoline demand to decline 320,000 bpd or 3.4 percent this year compared with 2007, with the consumption level projected to decrease another 50,000 bpd or 0.6 percent in 2009 versus 2008. If realized, the 2008-2009 period will mark the steepest consecutive two-year decline in gasoline consumption since 1979-1980.

“Taking account of the rise in average ethanol content of motor gasoline, estimated to be 635,000 bbl/d in 2008 and 675,000 bbl/d in 2009, the decline in consumption of petroleum-based gasoline components is even larger,” said the EIA.

The current drop in gasoline demand was consumer conservation triggered by sharply higher prices, and a very weak economy, with the United States in a recession since December 2007.