Goldman Sachs said on Friday it was still not adopting the view of crude prices falling to $20 per barrel as its baseline forecast, saying it did not see the market hitting storage capacity constraints.
The influential U.S. investment bank maintained its WTI price outlook of $40 per barrel for the first half of 2016.
"Barring a supply or demand/weather shock that shifts the balance by more than 340,000 barrels per day," excess output can be stored for a longer time horizon before the surplus starts saturating markets and fuels a collapse in commodity prices, the bank said.
"The key theme for 2016 will be real fundamental adjustments that can rebalance markets to create the birth of a new bull market, which we still see happening in late 2016."
While acknowledging that the risk to prices from geopolitical concerns were high, analysts at the bank said there was little threat of such factors affecting supply, since a significant portion of supply was already offline.
Goldman said mid-December that oil could fall as low as $20 per barrel, but assigned a fairly low probability to that scenario.