SINGAPORE (Oct 1): Credit Suisse has cut its forecast for the price of Brent oil for 2014 to US$105 a barrel from US$111.

It did the same for its 2015 projection, reducing its estimate to US$97 from US$103.

Analysts from the Swiss bank based their latest forecasts on lacklustre global demand and an increase in supply from the US.

“We think we are witnessing a turning point that will most likely end a four-year-long run of extraordinarily stable, triple digit prices,” they said in a note.

“Brent oil futures have been trapped in a narrow range of around $110/barrel for a record 15 quarters in a row, but they seem to be breaking out to the downside.”

Already, oil demand from the US “surprised to the downside” in 2Q2014, slipping 0.7% y-o-y, they noted.

Demand from Europe may fall 1% this year, according to their estimates.

On the supply side, the so-called US shale revolution is “far from over”, they said.

“Oil market fundamentals have continued to weaken. The real problem, in our view, is supply.

“In contrast to the consensus, we find that oil demand growth is tracking close enough to expectations, but North American production growth is overwhelming that demand. Oil inventories continue to rise.”

Under Credit Suisse’s “central global” scenario, Saudi Arabia – “the self-appointed central bankers of oil” – will cut output, enabling prices to “settle on a gentle glide-path toward normal”.

In the event that Saudi doesn’t reduce output, Brent prices could find a “floor” at US$80, while prices for West Texas Intermediate or light sweet crude could settle at US$70.