A leading energy analyst stated that crude oil prices may fall below $25 a barrel in 2009 while gas prices could drop below $1 a gallon if the worsening recession spreads to the country of China.
Francisco Blanch, a Merrill Lynch Commodity Strategist said that “A temporary drop below $25 a barrel is possible if the global recession extends to China and significant non-OPEC cuts are required. In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations.”
Other experts think the price of oil could drop even lower. Joe Petrowski, Gulf Oil CEO, believes that the price of oil could sink as low as $20 a barrel by early next year.
Tetsu Emori, a commodity markets fund manager at ASTMAZ Futures Co. in Tokyo said that “The damage to the economy by the financial turmoil is much bigger than the market initially thought. The economic data now is much worse than what we expected a few months ago.”
