KUALA LUMPUR (April 9): Crude oil prices may rebound to US$80 a barrel within three to five years, in anticipation less upstream investments amid current low prices will curb supply of the commodity, according to Franklin Templeton Investments.

Franklin Templeton executive vice president and portfolio manager Alan Chua said less investments for oil and gas exploration and production would further bolster oil prices, going forward.

"There is not very much investment going into finding new reserves. That sets it up for long-term undersupply," Chua told reporters at the launch of the Templeton Global Equity Fund today.

Today, oil prices rebounded following a substantial overnight decline. Reuters reported oil prices had earlier fallen 6% on a shock jump in U.S. crude inventories and record Saudi output, although analysts say sentiment remained bearish.

Brent crude was up 52 cents at $56.07 a barrel by 0517 GMT, while U.S. crude rose 55 cents to $50.97 a barrel. Both benchmarks dropped around $3.50 on Wednesday.

Franklin Templeton Investment, which manages US$880.1 billion worth of global assets, said minimal changes at the small level of imbalance between oil demand and supply could eventually help push prices higher.

In the current oversupply landscape, Chua said the imbalance could diminish amid political instability in oil producing countries, and world economic recovery.

Political instability in major producers is expected to curb oil supply, while world economic recovery is anticipated to generate higher demand for hydrocarbon resources.

"So what I'm trying to say here is that if a slight change in supply where further instabilities occur in oil producing countries, you could see the imbalance go away very quickly.

"Or if you see economies recover more strongly, that (imbalance) could disappear very quickly as well," he told reporters at the launch of the Templeton Global Equity Fund today.