Analysts once believed an agreement by oil producers to pump less would send crude prices to $60 a barrel in relatively short order. Now, Credit Suisse believes prices won't even approach that level until 2020.
The investment bank on Monday lowered its long-term price forecast for U.S. West Texas Intermediate crude by $5 a barrel, to $57.50 in 2020. Brent crude, the international benchmark contract, also got a $5 cut, to $60 a barrel in 2020.
The oil market won't reach a lasting turning point until the third quarter of 2018, according to Credit Suisse. The bank pushed out its expectation for the long-awaited rebalancing of supply and demand until 2019.
A group of oil producers led by Saudi Arabia has cut output by 1.8 million barrels a day through March in a bid to shrink global crude stockpiles to the five-year average. Credit Suisse believes inventories will still be 120 million barrels above that level by the time the deal is scheduled to wind down.