Oil to Crash to $20 Later This Year?

I've written a few posts about the ongoing oil glut, the current manipulative oil speculation, that the current oil price has nothing to do with supply and demand fundamentals; I've been betting for some time oil will go down. How low? I haven't said for certain. University of Calgary professor Phillip Verleger sees it heading to $20 a barrel:

A crude surplus of 100 million barrels will accumulate by the end of the year, training global storage capacity and sending prices to a seven-year low, said Verleger, who correctly predicted in 2007 that prices were set to exceed $100. Supply is outpacing demand by about 1 million barrels a day, he said.

“The economic situation is not getting better,” Verleger, 64, a professor at the niversity of Calgary and head of consultant PKVerleger LLC, said in a telephone nterview yesterday. “Global refinery runs are going to be much lower in the fall. If the recession continues and it’s a warm winter, it’s going to be devastating.”

He adds,

“OPEC don’t realize the magnitude of the cuts they need to make,” which would total about a further 2 million barrels a day, Verleger added. “Storage is going to become tight. It’s not clear if there’s going to be enough storage available.”

- Brewskie