If oil's roughly 20% drop in the past month holds, U.S. motorists will receive a modest gift -- a drop in prices at the gas pump that should be in the 30-cent to 40-cent range.

In fact, prices are already tumbling. The average price Monday for regular unleaded was $2.79 per gallon, down 8 cents from a week ago, according to gasbuddy.com. Even so, the price still is about 17% higher than a year ago.

One obvious headwind for the U.S. economy, as it attempts to build on initial recovery momentum? Gasoline prices.

The average price of regular unleaded has risen 3.79 cents in the past three weeks to $2.85 per gallon, according to the Lundberg Survey of 5,000 stations, Bloomberg News reported.

And, as U.S. drivers know, the average doesn't tell the whole story. Prices for regular unleaded are already above $3 in higher-cost areas such as New York City, Los Angeles, and San Francisco.

As expected, OPEC left its production quotas the same on Wednesday, in what was, from a revenue standpoint, its easiest decision in many official meetings.

Further, even though OPEC is pumping about 2 million more barrels per day (bpd) than its 24.845 million bpd official quota, the market is not punishing the group for it. A combination of decent demand, a weak dollar, and global GDP growth has pushed oil prices to levels that are roughly double what they were a year ago. Oil late Wednesday traded down 3 cents to $82.67 per barrel.

The markets Friday received more data that suggests the global economic expansion is strengthening: The International Energy Agency again increased its 2010 global oil demand forecast, this time by 70,000 barrels per day, to 86.6 million barrels per day (bpd). This represents a 1.8% or 1.6 million bpd increase from the same period a year ago.

Further, in its March report, the IEA forecasts that all of the demand increase will occur in emerging markets, or in what IEA calls non-Organization for Economic Cooperation and Developed (OECD) countries. Oil traded Friday afternoon down 84 cents to $81.27 per barrel. However, oil is still up more than 100% since December 2008.

The U.S. Labor Department's February jobs report, which indicated the world's largest economy lost just 36,000 jobs in the past month, points to a month in the near future in which in the U.S. economy final starts adding jobs on a monthly basis. Job growth appears to be up ahead: that's the good news.

The not-so-good news concerns the likely trend for gasoline prices: when the U.S. economy starts adding jobs, that means increased gasoline demand, which will likely send already-high gasoline prices up even more.

Oil inventories are high, U.S. unemployment has taken millions of drivers off the road, but the price oil is ignoring both to trend higher: oil closed Wednesday up $1.20 to $80.88 per barrel.

Further, Haag Sherman, chief investment officer for Salient Partners, told Bloomberg News he sees oil moving above $90. "You are going to see it breaching $90 a barrel, up to $100 barrel; $147, $150 is out of the question in the near term," Sherman said.

Oil's latest lurch higher -- it rose $1.61 to $78.94 per barrel Thursday -- has an upside and a downside.

The upside? Traders are bidding-up oil amid increasing signs that the U.S. economic recovery is strengthening. You read correctly: a strengthening U.S. economy. In particular, manufacturing, so hard hit by the 2007-2009 recession, is showing signs of not only adding employees in the sector, but to also contributing substantially to U.S. GDP growth. Second, exports continue to trend higher. If each trend continues, the U.S. economy will likely grow more than 3% this year, and job growth will resume.

There's talk that sluggish global oil demand will persist into the summer of 2010 and weigh on oil prices, but don't tell that to oil traders. Oil surged $3 to $77.13 per barrel on Tuesday at mid-day.

Tuesday's catalysts? A better-than-expected February Empire State Manufacturing Index, which jumped 9 points to 24.91, well above the Bloomberg survey estimate of 18. Further, a weaker dollar aided oil's rally, with the buck weakening 1.6 cents versus the euro to $1.3763, amid moderating concern over the Greek debt crisis.

The way the price of oil has plummeted this week on the dollar's rise amid the flight-to-safety lends more support to the theory that if the U.S. budget was balanced, crude would fall, oh, about $30 or $35.

Oil is priced in dollars. Hence, when the dollar falls, oil's price usually rises, and vice-versa. Starting in 2001, the dollar began to weaken as the U.S. budget went from a surplus under President Bill Clinton to a deficit under President George W. Bush, with the euro strengthening from about 82 cents versus the dollar to the current $1.3605. During that time oil's price has more than tripled from the $25 per barrel crude price in 2001.

What would provide both a nice 'tax cut' for Americans and boost the U.S. economy, as well?

A slide in oil's price to about $45-50 per barrel. And wouldn't the sound of $45 oil be music to policy makers' ears?

Rising gasoline prices most certainly pose a risk to the U.S. economic recovery, and the reverse, a decline, provides a tailwind. Every $1 per barrel drop in oil's price increases U.S. GDP by $100 billion per year and every 1 cent decrease in gasoline's price increases U.S. consumer disposable income by about $600 million per year.

It's been stated before, but it's worth repeating that two enduring trends of the high-oil-price era will be localization and increased density.

Essentially, in the decade ahead the U.S. economy (but not only the U.S.) will adjust by shrinking the distance between just about everything. Spatial geography will adjust to the reality of higher transportation costs per mile.

The price of oil, which these days seemingly averages one new, bullish catalyst a week, now has another -- to ring in the new year: a possible colder-than-normal winter in the northern hemisphere.

Bitter cold weather from the United States to China has increased the demand for heating oil, particularly in the oil-use-heavy Northeast U.S., and in the process boosted the value of crude. Of course weather patterns can shift, but as of now it looks like the U.S. may be in for a colder-than-normal winter. Oil, which traded Tuesday afternoon up 39 cents to $81.90 per barrel, will now likely take out last year's high at/near $82.

Let's just say OPEC is in an enviable position.

Come to think of it -- when hasn't OPEC been in an enviable position? OPEC heads into its December meeting next week "in the catbird seat," to cite an old phrase popularized by the late, great Red Barber. OPEC does not have to cut production to keep prices high -- they're already high: oil closed Friday up 40 cents to $73.05 per barrel. The roughly doubling of oil's price in 2009 is the main reason the average U.S. gasoline price for unleaded regular has risen about $1 to $2.60 per gallon this year.

All is not well in paradise. Producer prices rose 2.4% in November. While this the first gain this year, the size of the jump was much more than expected and the highest since October 2008. At than time we were coming off record oil prices. Analysts had expected a meager 1.6% rise, a surge in energy prices in the past month contributed to a much higher rise.

The Federal Reserve is meeting today and tomorrow. The Fed will then issue its policy statement on interest rates. It is expected that interest rates will remain low. All eyeballs are on whether the Fed will still include the words: "Extended period."

For a quick "economic upper," check out the recent Columbia University forum on business and the U.S. economy featuring Bill Gates and Warren Buffett, which will undoubtedly be re-broadcast on CNBC during the holiday season. Amey Stone of DailyFinance has a good summary of the event.

One key takeaway: Gates, whose company Microsoft (MSFT) invented computer operating systems and software that revolutionized the business world, is now forecasting that alternative sources of energy will soon be discovered. These are not only cheaper than current energy forms, but also environmentally friendly.