Merrill Lynch predicts that Oil could fall to $25or lower.
Crudeoilpricesmay crash below $25 a barrel next year and gas prices couldfallbelow $1a gallon if the global recession spreads to China, anenergyanalyst andCEO said Thursday.
Demand for oil will continue to decline in 2009 as economic 
slows to its weakest level since 1982, Merrill Commodity Strategist Francisco Blanch concluded in a report.
"A temporary drop below $25 a barrel is possible if the global recession extends to Chinaandsignificantnon-OPEC cuts are required," Blanch was quoted byBloombergas saying."In the short-run, global oil demand growth willlikely takea furtherbeating as banks continue to cut credit toconsumers andcorporations."
InOctober, when oil was trading foraround $100 abarrel, Merrill predictedprices could drop to $50. Oilfell Friday to$43.64 a barrel in electronic .
The last time crude fell below $25 a barrel was November 2002.
Meanwhile, Gulf Oil CEO Joe Petrowski said on Wednesday that the price of oil could sink even lower — to $20 a barrel — and gasoline prices could drop as low as $1 a gallon by early next year
WithChinafallinginto a recession at a rapid pace OPEC will not be able tocutOIL fastenough to offset the decline of OIL demand and prices.
Merrill Lynch also said that Oil sand companies could begin shutting in productions if
oil fall below $38 a barrel.
(The Globe and Mail, Sat, Dec 6, 2008)