NEW YORK, NY – Banking giant J.P Morgan has cut its oil price forecast for 2015, saying prices could go as low as US$38 by March.

The company said it expects to see a U-shaped recovery in Brent crude oil prices, rising to $90 a barrel in 2019.

“We see significant oil oversupply with risk that Brent falls below $40 a barrel in the near term, should the oil market not be able to accommodate a 1.6 million-barrel-a-day surplus,” it said in a note Monday.

It added that oil prices could trough in March at an average of $38 a barrel.

J.P. Morgan cut its 2015 average Brent crude price forecast to $49 a barrel from $82 a barrel and its 2016 average forecast to $56.80 a barrel from $87.75 a barrel.

Brent crude oil prices steadied below $49 a barrel yesterday after the International Monetary Fund cut its forecast for global economic growth in 2015, implying lower demand for fuel.

Global growth is projected at 3.5 percent for 2015 and 3.7 percent for 2016, the IMF said in its latest World Economic Outlook report, reducing its forecast by 0.3 percentage points for both years.

Oil prices have dropped by more than half since June as output has soared while demand growth has slowed.

Members of the Organization of the Petroleum Exporting Countries have said they are leaving the oil market to find its own level and hope lower fuel prices will stimulate more demand in the long run.

Iran’s Oil Minister has indicated OPEC has no intention of cutting output to buttress prices, saying the Middle East producer could withstand prices as low as $25 (U.S.) a barrel, according to reports.

The strategy is stoking fears of deeper cuts to staffing and spending plans in Canada’s energy sector as companies hunker down for a prolonged slump.

Lightstream Resources Ltd. and CanElson Drilling Corp. on Monday joined a growing list of companies that have slashed budgets and in some cases scrapped investor dividends in response to the roughly 60-per-cent plunge in oil prices since June, 2014.