JP Morgan has cut its outlook for oil, predicting that Brent crude prices will average $73 a barrel in 2019 — down from the investment bank's previous forecast of $83.50 a barrel.
Scott Darling, head of Asia-Pacific oil and gas at JP Morgan, told CNBC that the investment bank recently revised its outlook in part due to North American supply ramping up in the second half of next year. JP Morgan expects the price of Brent, the international benchmark for oil, to go toward $64 in 2020.
Demand growth will weigh, particularly after the Organization of the Petroleum Exporting Countries (OPEC) agreed to ramp up production earlier this year, he said.
The market is now focused on the group's next meeting on December 6 for guidance. Darling said OPEC needs to cut oil production by 1.2 million barrels a day for the whole of next year to balance the oil market.
Crude oil prices have seen ups-and-downs this year, with prices spiking to multi-year highs in October due to Trump's decision to reimpose sanctions on Iran. Sanctions on the third-biggest producer in OPEC has put upward pressure on oil prices throughout much of the year.
Major crude oil benchmarks spiked to four-year highs one month before the sanctions went into force, but that rally has since unwound spectacularly. Oil prices have plunged 30 percent since early October, dragged lower by a broader market sell-off and growing consensus that supply will outstrip demand next year.
"U.S. politics has played a part ...(but) it's still been supply-demand driven," said Darling.
His comments came after President Donald Trump on Wednesday doubled down on his defense of Saudi Arabia, thanking the kingdom for helping to keep a lid on oil prices, even amid bipartisan criticism for his support for Riyadh after the killing of journalist Jamal Khashoggi.
The Trump administration has relied on Saudi Arabia to hike output — and convince other producers to pump more oil — in order to offset the inflationary impact of its hawkish Iran policy.
— CNBC's Tom DiChristopher contributed to this report.