Future of Black Gold Remains Cloudy

NEW YORK (TheStreet.com) --

Despite encouraging economic indicators suggesting that the overall health of the economy is improving, there have been signs that future U.S. demand for crude oil will be slow, putting a damper on the volatile commodity.

Improvement in U.S. GDP and the real estate markets are both indicators that the nation's economy is slowly on the mend and in general as economies recover and grow, demand for black gold follows.

However, this time it doesn't seem to be the case. Most recently, the Energy Department released a report indicating that crude stockpiles rose 128,000 last week as compared with forecasts for a 1.15 million-barrel reduction suggesting that demand for crude is just not there.

Additionally, the emergence of alternative energy is on the up and up and continues to flourish. In fact, DuPont(DD Quote) has invested nearly $120 million in solar energy and expects a rapid growth in the photovoltaic market. To make investing even more attractive in alternative energy, the U.S. Energy and Treasury Departments announced that they will hand out $2.3 billion in tax credits to clean energy equipment makers.

In the U.S., energy from wind has become a phenomenon as well. In 2008, wind projects accounted for 42% of new electric capacity and enabled the U.S. to supply nearly 2% of its power from the energy source. In addition, energy from wind grew an astonishing 60% in 2008, making the U.S. the leader in extracting energy from the natural resource.