Goldman Sachs says the world has more oil than it had thought and expects prices to slip to $20 per barrel because the glut may linger deep into next year.
The International Energy Agency forecast on Friday said oil supply from the United States, Russia and other non-OPEC countries is expected to drop sharply next year - possibly the steepest decline since the Soviet Union collapsed.
The IEA says non-OPEC production is expected to drop nearly half a million barrels to 57.7 million barrels a day. It said that would be the largest annual drop since 1992.
Amid booming U.S. production and high OPEC output, the benchmark price of oil plunged from over $100 last year to about $45 this week. Global oil demand has also grown, but not enough to absorb the high supply.
Goldman analyst Damien Courvalin says these cuts may not be enough. He lowered his forecast for 2016 to $45 per barrel from $57. He says prices could collapse to around $20 if production decreases too slowly.
The Associated Press contributed to this report.