[Keith_McClary]

Bloomberg

[wisconsin_cur]

Bloomberg

Dec. 5 (Bloomberg) -- Bets that oil for January delivery will fall below $20 a barrel were the most active options contract in electronic trading today, a day after Merrill Lynch & Co. said oil may drop to less than $25.

Oil may dip to a six-year low if the worldwide recession spreads and the Organization of Petroleum Exporting Countries fails to stem declines, Francisco Blanch, Merrill commodity strategist, said in a report yesterday.

“Under a number of circumstances including a recession in China and a failure from OPEC to cut enough output, we could see prices dipping all the way to $25 a barrel, which is the level at which we’ll destroy some non-OPEC supply,” Blanch said in an interview today. “We’re not forecasting that. We’re saying it might happen.” His 2009 forecast is for $50 a barrel.