Forecasts of moderate economic growth may be tempered by continuing concerns about energy costs, according to the latest report from Wells Fargo.

"Our feeling, and I think the feeling of most analysts, is that the economy will continue to grow — we're going to lose a step this year, we think — but we'll continue to grow at a reasonably good rate," Gary Schlossberg, senior economist for Wells Capital Management, said at the bank's annual economic forecast Wednesday at the Marriott Downtown.

"Within that, the key issue is responding to higher fuel costs, the risk of that spike in oil prices."

With the recent, renewed alarm regarding Iran and continuing uncertainties about oil production in Nigeria, crude oil prices have again crept higher, nearing $70 per barrel. And, though Schlossberg said there are signs that the economy is already beginning to respond to prices at that level — Americans are driving less, buying more fuel-efficient vehicles and looking more seriously into alternative technologies — adapting to new conditions may take some of the gas out of consumer spending and the broader economy.

Which, if it happens, could also put downward pressure on Utah's economy, said Sterling K. Jenson, regional managing director of Wells Capital Management.

Utah's economy in 2005 far outpaced the nation's modest growth, with a 6.1 percent (gross state product) growth rate, compared to 3.6 percent nationwide. Retail sales saw double-digit growth, and the state added 44,000 jobs.

This year, Wells Capital expects the Utah GSP to come back toward the forecasted national GDP rate of 3.4 percent. Job growth likely will moderate, and retail sales likely will back off from double-digit growth to about 7 percent to 8 percent, Jenson said.

"In general, I think it'll be a fairly decent growth year for the state of Utah," Jenson said. "The biggest concern is energy prices. If we continue to see energy prices increase to levels that were not expected — that means oil somewhere up into the $80 to $100 per barrel range — I think that that could be very difficult for the economy."

Jenson put the probability of prices reaching those levels at 20 percent to 25 percent.

However, Schlossberg said that the long-term outlook for the energy sector is "favorable." Prices are high enough to encourage development of new resources and technologies and to begin the process of weaning America from its addiction to foreign sources of crude oil, he said.

"We think we're going through the most difficult period," Schlossberg said. "We still could see some shocks because the market is so tight, but hopefully it will wind down a bit."