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Is it time to get back into oil?

Pumpjacks pump petroleum from the ground.
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Markets may be expecting oil prices will remain lower for longer, but some analysts are forecasting a quick recovery.

"Today's supply-demand mismatch seems likely to be absorbed in a year's time, if not sooner. Prices would reasonably be expected to return to the $100 a barrel averaged for the past three years," David Carbon, chief economist at DBS, said in a note this week. "Crude at $100 a barrel one year from now would imply a 210 percent return. Nobody expects that from equities."

Oil prices have plunged since mid-2014, with Brent at $48.52 a barrel at Thursday's close, down from levels over $110 in June of last year amid Organization of the Petroleum Exporting Countries' (OPEC) decision to maintain its production levels and as U.S. shale oil operations ramped up production.

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While weak demand and strong supply may be equally responsible for the oil price drop, the supply-demand divergence is only about 2 percent of total global supply, Carbon estimated. "A 2 percent divergence between supply and demand shouldn't bring a 60 percent drop in prices," he said.

Demand growth in Asia absorbed around 60 percent of the surge in U.S. supply last year and the region will likely want to take up around 135 percent of it this year, even as U.S. shale supply is set to stop growing by 2017 and start falling by 2020, he said.

Some expect U.S. oil production – and oil prices – will start to decline even sooner. "U.S. shale oil production is likely to start to decline in the second half of the year," Tom Pugh, commodities economist at Capital Economics, said in a note Wednesday, citing data suggesting a 5-15 percent decline in the number of rigs drilling for oil there.

While many producers locked in prices well above current market levels, those hedges will eventually run out and they will be exposed to the lower prices, he noted.

"Oil prices are not currently high enough to incentivize firms to drill new wells. Output from shale wells declines very quickly, which means that new ones have to be continually drilled to replace the output," Pugh said.

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"We would expect markets to begin pricing in falls in production a while before they occur. This supports our view that the price of Brent will rebound to $60 per barrel by the end of year," he added.

To be sure, many analysts disagree. Earlier this month, Goldman Sachs slashed its oil price forecasts, saying in a note that the "new normal" for oil is lower for longer as exploration and production costs have fallen, pushing down the pain threshold for producers. Goldman also noted that moth-balled shale production can be restarted quickly to take advantage of any upticks in crude.

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But oil producers are optimistic that the price decline is a blip. "It will stay for another month at this low price, but I'm sure the price will rebound," Abdullah al-Badri, the organization's secretary general, told CNBC Wednesday at the World Economic Forum in Davos, Switzerland.

--Katrina Bishop contributed to this article

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter