Dec. 4 (Bloomberg) – Crude oil may dip below $25 a barrel next year if the recession that?s slashing fuel demand around the world spreads to China, Merrill Lynch & Co. said.
Global oil demand will contract in 2009 as economic growth slows to its weakest since 1982, Merrill Commodity Strategist Francisco Blanch said in a report today. In October, when oil was around $100 a barrel, the bank predicted that prices may slide to $50. Crude traded at $45.30 in New York today, the lowest since February 2005.
?A temporary drop below $25 a barrel is possible if the global recession extends to China and significant non-OPEC cuts are required,? Blanch said. ?In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations.?
Crude hasn?t fallen below $25 a barrel on the New York Mercantile Exchange since November 2002."
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