Economist sees $20 oil amid 'devastating' glut

In the future lies $200 oil or $20 oil. Take your pick.

University of Calgary professor and former U.S. government advisor Philip Verleger says the price of oil will collapse to $20 per barrel this year, as the recession reduces demand far below what OPEC and other oil producers have forecast, Bloomberg News reported Thursday.

"The economic situation is not getting better," Verleger, 64, a professor at the University of Calgary and head of consultant PKVerleger LLC, told Bloomberg News Wednesday. "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." Verleger expects a 100-million-barrel oil surplus by year's end to strain storage capacity and trigger a massive decline in prices.