Arab News: "Oil may fall to single digit, warns economist"

Do tell:

The steep fall in oil prices due to the ongoing economic crisis could result in drastically low oil prices ranging between $15-$20 per barrel or even a single-digit per barrel.

The worst-case scenario will remind us of the situation of the 1990s Asian crisis, a senior economist warned yesterday. Simon Williams, chief economist, Gulf markets at HSBC, in a briefing titled “Shelter from the Storm,” held yesterday at the Ritz-Carlton, Bahrain, said oil was the bedrock of the regional economies.

"The Gulf is still digesting the oil price shock as the shift to a new oil price equilibrium has fundamentally changed the Gulf as an economic story. Here everything is directly or indirectly linked to the hydrocarbon industry, and if falling oil prices touched its lowest then everything will be at a grinding halt.

"The GCC as a region has immense hydrocarbon resources heavily dependent on oil income which constitutes half of the gross domestic product of these six nations," Williams added. The economist, who was joined by David Bloom, global head of foreign exchange strategy, HSBC, during a joint presentation on Global Markets Outlook ‘09, said the ongoing economic turmoil had already hit hard GCC markets which lost about 50-60 percent of its total value in the last 10 months. [...]

So what will prices at the pump look like?