(Ecofin Agency) - Low crude oil prices will continue longer than expected Morgan Stanley, American multinational financial services corporation revealed.

The bank on Thursday reduced its 2016 Brent price prediction to $30 per barrel (a 40 % reduction from its initial prediction) stating that a disparity between supply and demand is to persist for another two years.

In January, the World Bank cut its outlook for price of crude oil for 2016 to $37 per barrel from its $51 forecast in October 2015.

“The challenge is that demand growth is slowing. When combined with seasonality and lagged data, confirmation of large draws and rebalancing now may not be apparent until mid-2017 in our base case,” analysts at Morgan Stanley said.

The call for production cut to curtail the drop in crude oil prices from oil-dependent economies keep rising. In January, oil fell to the lowest driven by the Organization of the Petroleum Exporting Countries (OPEC)’s failure to arrive at an agreement over output limits, Iran’s come back to the oil market as well as Russia pumping of oil at the highest pace.

Morgan Stanley warns that if the balancing of supply and demand is not achieved, the instability in crude oil prices will continue.

According to IBTimes, in 2015 OPEC had expected a global supply glut of approximately 2 million bpd representing the outcome of the increase in production from non-OPEC nations, including US and the low economic outlook in China as well as other developing countries.

Anita Fatunji