Crude oil may dip below $25 a barrel next year if the recession that is slashing fuel demand around the world spreads to China, according to a Bloomberg report.

Global oil demand will contract in 2009 as economic growth slows to its weakest since 1982, Bloomberg quoted Merrill Lynch Commodity Strategist Francisco Blanch as saying.

“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.