The strategists forecast WTI crude oil prices would remain at around $40 per barrel for most of the first half of the year, which would "slow supply growth, keep further capital investment in U.S. shale sidelined, and
"We think the oil market is experiencing a marginal cost re-basement," they said.
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Mueller-Glissmann and colleagues forecast that "balance" would return to global oil markets by 2016 and they upgraded their 12-month view of the commodity sector to "overweight" from "neutral".
"By the end of 2015, we see inventories closer to a neutral level and prices rising to the marginal cost of production, which we estimate to be US$65 for WTI and US$70 for Brent. However, the timing of normalizing inventories and prices remains highly uncertain, in part due to ongoing cost deflation in shale," they said.
Barclays also revised down its forecasts for oil prices on Wednesday, in its second substantial revision in recent months. The bank now forecasts Brent and WTI will average $44 and $42 respectively over 2015. Less than two months ago, Barclays' forecasts were $93 and $85 respectively.
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Brent crude oil prices slipped to under $49 a barrel on Wednesday, pressured by the strengthening dollar. Oil prices were also pressured by an industry report showing a larger-than-expected rise in U.S. crude inventories.
Brent has fallen almost 60 percent since June last year. Earlier this month, it traded close to a six-year low of $45.19, and has since stabilized in a tight range just below $50 per barrel.
U.S. crude oil fell to under $45 per barrel on Wednesday.
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