While there were now revised forecasts for even lower oil prices, with Standard Chartered calling $10 a barrel, Yergin said the industry would need to run out of storage space to that depressed level — a situation that IHS's data does not support.
Justifying the bold call, StanChart said that oil prices were being moved almost entirely by financial flows caused by fluctuations in other asset prices, which meant that no fundamental relationship was driving the market towards any equilibrium.
"With Saudi Arabian oil spokespeople remaining relatively quiet as prices fall, and with high inventories and the expectation of more supply blunting any potential market concern over geopolitical tensions, the sources of short-run support are fairly limited. In the extreme case, the only definition of a floor would come when the entire market felt that prices had undershot too far," the bank's analysts wrote.
The last time crude oil fell to $10 was between 1996 and 1998, when the industry ran out of storage space.
The oil selloff only two weeks into 2016 had spooked markets and accelerated a decline that has pushed prices down by about two-thirds since July 2014. Since the beginning of the year, oil has lost almost 20 percent, with U.S. WTI light sweet crude slipping below $30 a barrel for the first time in 12 years overnight.
Oil prices rebounded on Wednesday in Asian hours, with WTI jumping as much as 2.2 percent, although prices were still below $31 a barrel. The global benchmark, Brent crude, rose as much as 1.6 percent and was last up 0.5 percent at $31.02 a barrel.
According to trade data released today, China's crude oil imports hit a record 7.82 million barrels a day in December, as the world's second largest oil consumer stocked up its strategic reserves on the back of low prices.
The price gains also come after U.S. crude oil stocks unexpected decline in U.S. stocks of 3.9 million barrels last week, data from industry group American Petroleum Institute showed.