REUTERS
In a report published on Monday, the bank's commodity research team led by David Martin, dramatically slashed its outlook for both crude CLG6, +1.05% and Brent LCOH6, +2.66%, saying the oversupply in the market will keep prices from bouncing back until late this year, according to MarketWatch.
Its new forecast calls for crude to average $31.50 a barrel in 2016, down from $48.88 expected previously, and for Brent to trade around $31.25 a barrel, down from $51.50, according to the report.
The downbeat outlook comes as both benchmarks have plunged more than 20% since the beginning of the year, amid global growth fears, warm weather and concerns that the Organization of the Petroleum Exporting Countries will fail to cooperate in cutting production, according to the report.
In addition, the removal of sanctions on Iran over the weekend opens up for the nation to sell oil on the international markets, potentially unleashing millions of barrels of oil to an already oversupplied market.
Read alsoOPEC's oil basket price drops to $25 a barrelJ.P. Morgan's forecast downgrade follows a run of oil comments and outlook changes last week. For example, Goldman Sachs said it still sees oil climbing back to $40 a barrel by midyear, while U.K.-based Standard Chartered warned prices could fall as low as $10.