Morgan Stanley has been pretty pessimistic about oil prices in 2015, drawing comparisons with the some of the worst oil slumps of the past three decades.
The current downturn could even rival the iconic price crash of 1986, analysts had warned—but definitely no worse.
This week, the Wall Street firm issued a revision: It could be much worse.
The supply of new oil coming from outside the U.S. may continue to increase as sanctions against Iran dissolve and if the situation in Libya improves, the Morgan Stanley analysts said.
U.S. production could also rise again. A recovery is less certain than it once was, and the slump could last for three years or more—”far worse than in 1986,” analysts Martijn Rats and Haythem Rashed said in a report to investors.
“In that case,” they wrote, “there would be little in analysable history that could be a guide” for what’s to come.